2nd pillar

In the context of a real estate acquisition, your 2nd pillar (pension fund or vested benefits account) can be used to make up a part of your own funds.

The new regulations require that at least 10% of the purchase price must come from a source other than the 2nd pillar (e. g. cash or your 3rd pillar).

The 2nd pillar can be used in 2 different ways :

Withdrawal of the total or partial amount as equity (amount available for home ownership from your pension fund certificate)

• Advantages :
  – Decrease in the amount of your mortgage loan and the related charge

• Disadvantages :
  – Payment of a levy tax on the levy
  – Decrease in your pension at retirement
  – Decrease in survivor benefits (spouse’ s/orphans’ pension, death benefit)
  – Your 2nd pillar assets having been withdrawn, they become taxable in terms of assets

Pledge of your 2nd pillar assets

• Advantages :
  – Optimization of taxation through higher mortgage debt
  – No reduction in pension at retirement
  – No reduction in survivor benefits for survivors
  – No tax on the levy (the tax will be payable at retirement if the capital is withdrawn)
  – Your 2nd pillar assets remain tax-free in terms of assets
• Disadvantages :
  – Higher (but deductible) mortgage charge
  – Higher amortization (so that you can have the entirety of your 2nd pillar when you retire)

As you will have seen, your 2nd pillar is also a tool for optimizing the structure of your mortgage.

There is no single or universal recipe, the interest of a drawdown or a pledge depends on several factors that our experts will be happy to explore with you in order to find the most appropriate solution for your personal situation.