Perpetual home equity => pension => mortgage repayment flow?

Imagine
a) You’ve got a sizeable amount of equity in your home (from downpayment plus additional amortization)
b) You have a sizeable 2nd pillar built up over many years (regular and extra contributions), 0% of it pledged for acquiring the property mentioned above

Is it then feasible to each year take a portion of the home equity out through a HELOC, then use that to contribute to the second pillar, and in the same year take some out of your 2nd pillar to pay down the mortgage (using 2nd pillar contributions that you made 5-10 years ago)?

The benefit would be creation of an annual recurring tax deduction (due to the 2nd pillar contribution) that just keeps flowing year after year or am I missing something?

  1. There’s time limitations on when you can pay in and then withdraw again
  2. Once you’ve withdrawn an amount, you don’t get deductions until you’ve repaid what you removed.

So in the end you could in theory withdraw mortgage to contribute to the pension until you reach the maximum to get deductions and then later withdraw it again to pay off the mortgage.

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Nice try :roll_eyes:

  • no buy-ins before previous withdrawals are paid back in
  • 3-year limit applies to the whole pot, not single buy-ins
  • early withdrawals only every 5 years

edit: PhilMongoose was faster.

Only in theory?

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Wrong country.

Maybe, if they belong to different spouses.

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