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– Your 2nd pillar assets having been withdrawn, they become taxable in terms of assets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– No tax on the levy (the tax will be payable at retirement if the capital is withdrawn)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.