Buy to Let now...or wait a year??

shellbell63

chucky wrote: »

i'm not 100% sure if commercial property is allowed in a SIPP - but could be wrong unless it has changed.

Its only commercial property you can buy within a SIPP. Not residential.

GDB2222

Dithering_Dad wrote: »

Has anyone thought of buyign a commercial property within a SIPP and then rent it out?

I think that all the rent and any cap gains from sales will be free of tax because it's held within your pension. Would liek to have this confirmed though. It could be the best of both worlds between BTL and ISA?

Commercial property is allowed. Yes, the return is free of tax. However, apart from the 25% tax free lump sum, you pay tax on the pension.

shellbell63

Hey just noticed I'm now a fully fledge Moneysaving Convert - no longer a Newbie!
Thanks guys. Never thought my 'simple' question could provoke such debate!

Dithering_Dad

shellbell63 wrote: »

Let start -

what if ISAs are long gone in 20 years, - another tax efficient savings plan will replace it, just like ISAs replaced Peps and TESSAs. PEPs were introduced late 1980's to encourage people to save more and to invest in the stock market. As people seem to be saving less these days it's more likely that the ISA limits will be raised to encourage people to save more - which was the case last year when the limit was raised to £3600 for cash ISAs and £7200 for S&S ISAs

what if chancellor decides to tax them as pension fiasco - pensions are not taxed, Brown removed the tax credit on dividends.

what if int rates plummet & stay low? With inflation out of control, interest rates are likely to climb. We've had historically low interest rates over the last few years and so many people are beginning to think these are the norm - they're in for a rude awakening. The average for the UK is around 7%. If rates do fall though, people's mortgages wil be cheaper, allowing the surplus to be invested. Over a 20 year period, it's unlikely that rates will always be low. If rates are high for 10 years then low for 10 years, all the gains from high interest rates wil be locked into the savings.

What if - the very year you want to retire - your pension/stocks etc are worthless due to share prices at that particular time? - 5 or so years before retirement you move your money from volatile equity funds/shares and into stable government bonds and cash. Any crash will not affect you at all.

What if inflation is rampant & your ISA income is worth half - in relative terms - 10 years into retirement....... If inflation is rampant then interest rates will climb in order to control it, therefore increasing the value of your savings.

What if What if... As I said earlier in the thread there are many more things that can go wrong with property than with a savings account. Especially if most of your wealth is tied up in just two properties (your home and your BTL).

We're all taking a calculated risk one way or another, surely?

Please see my answers above...

Some risks are more calculated than others..

shellbell63

Dithering_Dad wrote: »

Please see my answers above...

Some risks are more calculated than others..

As in your previous 'tongue in cheek' post - this was my 'tongue in cheek' post. Not really serious - (though my wording re pensions may have been wrong, there is no doubt that chancellors legislation on pension funds, hit badly).

We are all taking calculated risks - because my decision may be different to yours, doesn't mean your right & I'm wrong or vice versa.

I shop at Morrisons - perhaps you shop at Asda - are you right? Or am I?:D

Dithering_Dad

shellbell63 wrote: »

As in your previous 'tongue in cheek' post - this was my 'tongue in cheek' post. Not really serious - (though my wording re pensions may have been wrong, there is no doubt that chancellors legislation on pension funds, hit badly).

We are all taking calculated risks - because my decision may be different to yours, doesn't mean your right & I'm wrong or vice versa.

I shop at Morrisons - perhaps you shop at Asda - are you right? Or am I?:D

I'm not saying investing in BTL is right or wrong, I'm simply saying that before entering into it people need to know all the facts and make sure they have factored in all the costs.

As I would with any sort of investing.

shellbell63

Dithering_Dad wrote: »

I'm not saying investing in BTL is right or wrong, I'm simply saying that before entering into it people need to know all the facts and make sure they have factored in all the costs.

As I would with any sort of investing.

Agree with you there.
:j

Jonbvn

shellbell63 wrote: »

We are all taking calculated risks - because my decision may be different to yours, doesn't mean your right & I'm wrong or vice versa.

Of course we are all taking risks. However, I think the point DD is trying to make is that the risks with most investments and savings are likely to be significantly less than those from a couple of of BTL properties. The reason being diversification - the eggs in one basket argument.

IMHO this gov't is more likely to bring in some tax law adversely effecting the BTL business rather than ISA and pensions.

shellbell63

Jonbvn wrote: »

Of course we are all taking risks. However, I think the point DD is trying to make is that the risks with most investments and savings are likely to be significantly less than those from a couple of of BTL properties. The reason being diversification - the eggs in one basket argument.

Why do you think someone doing BTL is sinking all eggs into one basket?
I've already said diversification is the key. I think few BTLers on here will be doing ONLY BTL. Just that BTL is part of our program as it were.

shellbell63

Jonbvn wrote: »

IMHO this gov't is more likely to bring in some tax law adversely effecting the BTL business rather than ISA and pensions.

You may be right. But they'd have to be careful not to price all BTL out of the market - or they'd have a whole host of homeless people on their hands.
Council housing is in short supply.