A real estate project through a pension plan
3 min
Have you thought about using your pension plan to finance your real estate projects? Whether you want to buy, build, or renovate, there are various advantageous ways of doing it that suit different situations.
Do you want to buy, build or renovate a house or apartment? If so, you can already take advantage from your pension plan (PLCI, EIP, CPTI, INAMI/RIZIV contract or group insurance). There are two ways to use your pension pot: by taking an advance or by using it as collateral for a mortgage.
Two formulas and several options
Request an advance
You can use an advance on your existing pension pot to finance your real estate project. Your insurance-based pension plan continues, and you continue to save until it reaches its term. Later, you decide whether or not to repay the advance to your pension plan. If you don’t repay it, its amount will be deducted from your pension pot. If you sell the property, you’ll have to repay the advance.
You can receive an advance, subject to an annual interest payment, as part of a PLCI or INAMI/RIZIV contract. In the case of a branch 21 EIP plan, you can choose to take an advance subject to an annual interest payment or an interest-free advance. Finally, for a CPTI, you have the choice between an advance subject to regular interest payments or an advance with interest that rolls up and is payable at the end.
Use your pension plan as collateral
Using your pension plan as collateral means that it serves as a guarantee for a loan. If you die before the final maturity of the loan, the death benefit of your pension plan will be automatically used to repay the loan. PLCI, EIP, CPTI and group insurance plans can be used as collateral.
Your benefits: why use your pension plan for your real estate project?
Financial resources
Using your pension plan today means can give you the financial resources to buy, build, renovate or improve a property in Belgium or in another member state of the European Economic Area (European Union plus Liechtenstein, Norway and Iceland).
For all types of properties
All forms of real estate are allowed, whether it’s a home, land, commercial property or a garage, and it can also be a second or third residence. However, it’s essential that you are the owner – or become the owner – of the real estate property and that it generates taxable income.
Lower fees
If you take advance on an insurance-based pension plan in order to finance a real estate project, you don’t have to pay survey fees, application fees, notary fees or mortgage fees. If you work as a self-employed person in a company, the company can pay most of the pension premiums.