Advantages for a self-employed person buying property
If you use a personal pension to fund a pension mortgage, the tax advantages are very significant. Depending on your age, you can put up to 30% of your earnings into a pension and get full tax relief.
| Age | % of Net Relevant Earnings qualifying for relief |
|---|---|
| To 30 | 15% |
| 30-40 | 20% |
| 40-50 | 25% |
| 50+ | 30% |
| Income over €253,948 will not qualify for tax relief in a personal pension. | |
This tax relief is at your marginal (higher) rate of income tax. This means that the tax savings can be very substantial, particularly where the mortgage is paid off using just the tax-free cash part of your retirement fund.
You can retire and pay off your mortgage any time between age 60 and 75.