The new property trend - ‘buy-to-forget’

It seems absurd to buy an overseas home that you never see or enjoy, but put it in the context of securing your future, in particular financial stability in your retirement, and perhaps it’s not so daft to ‘buy-to-forget’. Property which is classified as ‘commercial’, that is to say no personal use allowed, can be purchased as part of a Self-Invested Personal Pension (SIPP) and the tax benefits are considerable.

Andy Welland, MD of emerging market specialists GEM Estates which has several SIPP-able products in its portfolio comments, “If you’ve got several thousand pounds sat in a UK pension not doing much right now in the current financial climate, it could be worth considering switching a lump sum to a SIPP, or indeed setting one up from scratch. Depending on what personal tax band you’re in, any contributions you make will attract tax relief of between 20% and 40% - so £50,000 will become either £60,000 or £70,000 – and what’s more any rental income will accumulate in the SIPP tax-free and there is no liability to capital gains tax upon sale of the property. With the right independent financial advice a SIPP property purchase could prove to be very prudent.”

GEM Estates is promoting SIPP-compatible Caracola Beach and Spa Resort on the Venezuela island of Isla Margarita. High on facilities including the essential Spa, restaurants, bars, gymnasium, boutiques, beauty salon, swimming pools and hammocks, sunloungers and chill-out areas, the sandy beach is also on the doorstep. World-class Geneva Hospitality is maintaining the furnished properties and managing rentals with an impressive 7% net rental guarantee in place for ten years, rising to 8.25% for the latter five years if 75% occupancy is achieved in year five. Backed by an insurance bond this rental is truly ‘guaranteed’. 79,000 euros will secure a one bedroom apartment based on 30-70 payment terms with the final 70% payable on completion at the end of 2010.

Other SIPP-compatible products are on offer across the Caribbean islands of St Vincent & The Grenadines, Barbados and the Dominican Republic. All in the hands of Oasis Hotels & Resorts (part of giant Globalia Corporation) these properties are to be run as a hotel meaning that all units come fully furnished to a five star standard. There is also a 10% rental guarantee in place for the first two years after completion to reinvest back in that SIPP. Below market value prices start from £75,000 GBP for a studio at Las Canas Boutique Beach Resort on the Dominican Republic.

Whichever Caribbean island appeals contact us at GEM Estates and we will be able to introduce you to independent financial advisors who can assess your suitability for a SIPP property purchase with no obligation. Alternatively, ask your financial adviser to contact us directly.

For further information, visit gem-estates.com