Property Investments

Property as an asset class for investment has always been popular in Ireland and its probably fair to say it will remain that way.  If you are thinking of investing in property there are a number of ways for you to invest as follows:
  1. Privately in your own capacity.
  2. Use a Company Structure
  3. Use your pension to acquire the property
  4. In concert with others (Syndicated)

The choice of which method ultimately will depend on your individual circumstances. The following is a brief account of each.

Private Acquisition:

This method is quiet straight forward, you identify a property and if you have the cash resources or borrowing capacity you buy it. The downside to this method is the tax leakage involved.

Income from property is taxed as Case V Schedule D on the gross amount of rents receivable less any allowable expenses. As we are now in a high personal tax regime nearly 50% of income can be lost to taxation. Furthermore, if you sell the property over and above the original purchase price the gain will be subject to Capital Gains Tax.

As you can see this method is exposed to considerable tax leakage and may not be the most desirable method.

Company Structure:

This structure has advantages and disadvantages and will be specific to your own situation. A company structure should only be considered in certain circumstances and is not for everyone. We can assist you with the optimal tax efficient structure through our sister company Captax Associates.

Use your pension to acquire the property:

A Self Administered Pension is an excellent vehicle to purchase an investment property as it doesn't suffer tax leakage. Rental profits can grow tax free within the pension structure and increase in value of the asset when sold is not subject to Capital Gains Tax.

Some points to note if you are thinking of acquiring a property through your pension are:

All purchases, sales and lettings must be on an arms length basis from the beneficial owner of the pension. This includes but is not limited to any connected person or entity e.g. employer or associated company and family members.

  • Any purchase of a property which is subsequently used by a person or entity connected to the beneficial owner will be deemed to be a distribution from the pension arrangement from the date of first use and taxed accordingly.
  • Purchases of property with a view to development and immediate disposal is prohibited.

In concert with others (Syndicated)

By collectively getting together with a group of pooled investors you have the ability to enter investments that ordinarily would be out of your price range. If you, as part of a group of investors are seeking to purchase investment property Cap Finance & Investments will provide you with the necessary advice on how best structure this arrangement.

Recent regulatory changes have impacted on pooled property investments therefore, it's vital you have the right structure in place from the outset.

Additionally, we put together property investments for clients to invest in. If you would like to know more please contact the office.

Click on the button below to find out more on our buy to let mortgage offerings:


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