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Last Updated: Tuesday, 26 July 2005, 11:14 GMT 12:14 UK
Pension boost to property market
France and Spain are likely property hot spots for those investing abroad

If you invest in property to rent you are going to hear a lot more about property pensions.

Advisers, consultant and property agents are pinning their hopes on this new concept as a big boost to their business.

Buy-to-let enthusiasts are asking themselves whether it's right for them.


The way to put residential property in a pension plan will be through a SIPP, which stands for Self Invested Personal Pension.

From next April pension savers will be able to put in up to 215,000 a year and claim back the income tax they've been charged on all their earnings, if that's what they've put in.

They can borrow up to 50% of what they've put in and then use the money to buy residential property, or a broad range of other investments, which will be free of tax while they remain in the SIPP.

Property boost

Hargreaves Lansdown, a leading SIPP provider tried to measure potential property purchases by asking existing customers.

Of these, 37% said they'd be interested, from which the company extrapolates that 51,800 SIPP investors might buy property in their plans.

This would create a 5% increase in demand in the UK housing market.

Though some housing analysts are sceptical that the boost will be so marked.

One likely destination of money that is invested in property pensions is to overseas property and holiday homes.

France and Spain are likely to be the two top spots for those with the wherewithal to spend their holidays enjoying themselves literally inside their pension plans.


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