Press Room
SIPP's - A Boost to the Local Property Market
On the 6th April 2006, The British Government will allow changes into the way SIPP's (Self Invested Personal Pension) are administered, in that British Pension Plan holders who will be allowed to invest in property. It is predicted that 4 billion Sterling will pour into the UK and overseas property market.Trafford Busuttil, Managing Director at Propertyline Real Estate Agency, who recently attended a training seminar held in London on SIPP's, is of the opinion that "if Malta gears up for the launch of SIPP's in April next year it would be very fruitful to the local property market and all trades and professions ancillary or associated to this market."
Mr. Busuttil, who is also the Secretary of the Federation of Estate Agents (Malta), refers in particular to the fact that Maltese legislation allows for property investors to purchase through a trust only in special designated areas and hopes that this will also be extended to all properties on the local. This is because property purchase through a SIPP may only be made through a trustee. Trafford Busuttil adds that "Malta is perfectly position to benefit from liberalization of SIPP conditions and not miss out on this golden opportunity especially since other competing countries within the EU, prospective EU members and the Mediterranean have made the necessary allocations for this potential investment." Statistics show that Malta has always been very attractive to the British market, which over the years averages at about 70% of the foreigners who purchase in Malta. In fact, 2 million Britons have second homes overseas.
The seminar brought to light the fact that the main attractions in SIPP amendments all relate to tax advantages.
SIPP's is most beneficial in that a number of pension holders may create a syndicate, by pooling into a common fund on an annual basis, with the added benefit that the trustee can then borrow up to 50% of the funds value. Experts predict that billions are going to be spent on the international property market. Bearing this in mind, Mr. Busuttil comments that "the Maltese Government should put this matter on its priority agenda in order not to miss the boat. Besides altering the legislation on trust it is also important to clarify the regulations of renting out property owned by foreigners in Malta. There are many investors out there with one consideration in mind namely buy-to-let property."