Residential Property Purchases through Pensions

Finance Bill 2023 – First Draft Published

October 23, 2023

Permanent TSB Fixed Deposit Options now available

June 28, 2024

The Process of Purchasing Residential Property through Pensions

The Irish insatiable appetite for property has not gone away with property transactions happening on a daily basis. With the Irish rental market for property currently very strong, many investors and their financial brokers feel that there is value to be found in the Irish property market at the moment.

Below, we outline the process involved in purchasing a property through a self-directed pension, and highlight some important factors for you and your client to consider along the way.

The Process: Buying a property in a pension

Buying a property through a pension is very similar to buying a property personally, however there are some important differences at different stages of the journey. Let’s outline these below.

When buying a property personally:

Step 1: You identify the property
Step 2: You put an offer on the property
Step 3: If the offer is accepted you put a deposit down through the Estate Agent
Step 4: You select a solicitor to act on your behalf
Step 5: Contracts are drafted and exchanged between the vendors and the purchasers solicitor
Step 6: Your solicitor checks the title to ensure all is in order
Step 7: If everything is in order, contracts are signed by you and the vendor and are exchanged
Step 8: The balance of funds to buy the property are transferred to the solicitor to complete the sale
Step 9: You take possession of the property

When buying a property through your pension:

Step 1: You identify the property
Step 2: You contact QRSL to confirm that the purchase of your chosen property is allowable through your pension i.e. that there is sufficient funds to purchase, by submitting a completed Investment Declaration and Property Questionnaire to newbusiness@qrsl.ie or existingbusiness@qrsl.ie
Step 3: Once liquidity is confirmed by QRSL you put an offer on the property
Step 4: If your offer is accepted your pension pays the deposit to the Estate Agent
Step 5: You select a solicitor to act on behalf of the pension – this solicitor will be formally engaged by QRSL to act on behalf of the pension and QRSL will then liaise with them directly
Step 6: Contracts are drafted and exchanged between the vendors and the purchasers solicitor – the buyer in this case is your pension
Step 7: The solicitor (acting for your pension) checks the title to ensure all is in order
Step 8: If everything is in order, contracts are signed by QRSL on behalf of your pension and the vendor and are exchanged
Step 9: The balance of funds to buy the property are transferred from your pension to the solicitor to complete the sale
Step 10: Your pension takes possession of the property

In both cases a reasonable time scale for completion of the purchase would be 6 – 8 weeks. For pensions this is from when QRSL are provided with the relevant details of the purchase.

So all in all, the process is very similar whether buying personally or through a pension, however, as you can see, there are a few extra things to consider when buying a property through a pension.

A few things to note …

Some extra documentation needs to be completed for QRSL (available at https://qrsl.ie/document-store/) to facilitate a smooth property purchase via the pension
A professional property agent needs to be appointed for a residential property
Your pension must have enough cash funds in the scheme bank account to cover the purchase price and all costs before we will sign or return a contract – if we are waiting on a contribution or transfer in to your pension scheme to complete a purchase we will not return a contract until funds are received
The solicitor’s client is the pension scheme
Auction sales attract additional complications so please contact QRSL in advance of bidding for a property at auction

Please note that the provision of this product or service by Quest Retirement Solutions Ltd does not require licensing, authorisation or registration by the Central Bank and, as a result, it is not covered by the Central Bank’s requirements designed to protect consumers or by a statutory compensation scheme.