Sipping your Margarita and enjoying your pension in paradise

With uncertainty about the health and future of the UK housing market dominating the headlines in the British press, and similar stories appearing in newspapers across the globe relating to housing markets from America to Australia, does property as an asset class still make a sound investment choice? According to the general consensus of expert opinion it does - because whilst housing markets the world over can suffer from volatility and slow periods, where there is a basic case that demand for real estate exists and especially where it outstrips supply, there will always be life in the property economy.

Taking this advice on board, an investor therefore needs to think about where demand for property is strong and likely to continue growing, and they also need to consider property as a long-term investment commodity rather than an asset that will potentially turn them a fast profit if they are going to include it in their investment portfolio. Which is why, when Gordon Brown as the Chancellor suggested that people would be able to put residential property into their pension funds thanks to the invention of the SIPP, (self invested personal pension), there was great interest with 6 out of 10 SIPP savers saying that they wanted to buy property with their pension and use it for long-term investment gains. Unfortunately, when a u-turn came about and would-be pension investors were told they were now not allowed to buy residential real estate with their SIPP funds, many were left feeling angry and disappointed.

However, commercial property assets are still eligible for inclusion in a SIPP and there are some very attractive tourism based commercial projects available that are SIPP qualifying. These give investors who wish to diversify their pension, and certainly include an element of real estate within their long-term savings plans, a chance to profit from exciting property projects in different parts of the world in a tax efficient way. One SIPP qualifying property investment project is the Caracola Beach and Spa Resort on the stunning and exotic Caribbean island of Isla Margarita. The island is attracting significant increases in annual travel and tourism numbers, witnessing a property boom and is believed to be a strong location for potential investment success thanks to the underlying fundamentals supporting the ongoing development and enhancement of the location. The Caracola project qualifies for SIPP status because investors are able to buy individual or multiple units within the condominium hotel resort development for rental purposes – thus making the investment a commercial one. Greg Walters, Director of Off Plan Property Abroad explains the details further: “to purchase an overseas property through a self invested personal pension the property needs to be designated as a commercial entity. An apartment within a condominium hotel such as the Caracola Beach and Spa Resort therefore qualifies.

The benefit of buying a property in this way, i.e., through your pension fund, is that you have tax free purchasing power. Over-demand and under-availability of good quality touristic accommodation on the island of Isla Margarita also makes purchasing an apartment at Caracola a very compelling investment proposition, especially using redundant or at best stagnating pension funds.”In terms of the properties available for sale in this island paradise, they consist of one and two bedroom apartments which come with an insurance bond backed guaranteed rental income of 7% for 10 years. Purchases at Caracola are also packaged to give owners relief from income and capital gains tax, and all in all Caracola provides a superb investment opportunity in an increasingly attractive emerging market.

Any buyer will ultimately own a potentially high returning, capital appreciating, tax enhanced commercial property asset in one of the best beachfront locations in the emerging Caribbean, where onsite amenities for guests are five star and high-grade ensuring this development stands out for the long-term. Onsite facilities include multiple swimming pools, a beach activity area, spa, nightclub, fitness suite, duty free shopping zone, sauna, kids club, conference rooms, beauty salon, restaurants, bars and cafes.