How to purchase property with a SIPP or Pension

What is a SIPP?

A SIPP is a Self Invested Personal Pension. By transferring cash funds or existing pension funds into a SIPP, you can take control of your pension investment and create a highly tax efficient property purchasing vehicle. It is a very simple transfer process, you will need advice from a qualified IFA.

I do not have a SIPP can I still use my pension to buy property?

Of course. You are able to transfer your pension fund into a SIPP fund and use this to fund your property investments.

Why buy property with my SIPP?

Repeatedly low performing pensions and uncertainty across investment security havebrought a change in the way people use their pensions for profit and income in later life.

Does planning for retirement really matter?

It is more important than every to provide for the future, and saving into a pension fund does little when stocks and equities have guaranteed little more than a headache at retirement time.

Can I buy any property with my SIPP?

No, only certain developments meet the guidlines for SIPP Investment. Residential property is disallowed. You may only purchase properties that have been HMRC approved for SIPP investment. In order for a development to become HMRC SIPP Approved, it must meet certain criteria and comply with the strict guidelines and criteria that is set out. The process can take up to 18 months for the Development to be approved for investment with a SIPP fund

How much can I borrow?

You can borrow up to a further 50% of the net value of a SIPP to fund your property investment. This means you can purchase up to 150% of the total value!

Will I be able to use the property?

No, unfortunately strict guidelines state clearly that no personal benefits are allowed while the property is owned by a SIPP

Are there tax advantages?

Tax benefits make a SIPP invesmtent a wise decision. Cash contributions attract tax relief at the individuals highest rate of tax

What are the potential gains?

There are now some fantastic HMRC SIPP approved Developments worldwide.

Potential gains are made up of a combination of compound interest, capital growth and income.

A typical example of a SIPP/Pension fund Property investment

This diagram shows a typical example of an investment using a SIPP as a purchasing vehicle. You will see that potential returns are fantastic and over a 10 year period, outstanding growth and gain is made.