The ability to invest in commercial property in a tax-free environment makes a SSAS pension very attractive. You could use a SSAS commercial property investment to build or expand your business, free up cash for your business, all whilst building up a retirement fund for your future.

What property can be purchased?

A SSAS commercial property investment can include:

  • Industrial units and warehouses
  • Offices
  • Shops
  • Pubs, hotels, restaurants, and cafes
  • Land including farmland
  • Non-residential buildings such as GP and dental surgeries.

Residential property is only allowed in limited circumstances, for example, a caretaker’s house as part of a commercial property. Morhart can help in determining whether a property is feasible.

Take control

With a property purchase your SSAS will become the landlord. Rent is then paid, tax-free, to the SSAS bank account for your future benefit. Properties can also be purchased from connected parties (including your business), enabling your SSAS to be a tool to free up cash.

You can even borrow funds to assist with the purchase if there are not enough funds available.

How does a SSAS property transaction work?

Purchase – buying a property through your SSAS is like purchasing a property using personal funds. A solicitor will need to be appointed to represent the purchaser (the SSAS). They will then carry out all the conveyancing such as searches, title registration, Deeds etc, on behalf of the SSAS.

The SSAS becomes landlord – once the legal work is completed funds from the SSAS will be paid to the solicitor to finalise the purchase. The SSAS will then become the landlord of the property and it will form part of the SSAS balance sheet.

Rental income – future rent generated from the property will then be paid from the vendor to the SSAS bank account to help build up a fund for retirement.

An example

A client runs their business out of a commercial unit. The unit is owned by a third party, and under the terms of the lease, rent is paid from the business to the unit owner each month. The unit is worth £200,000 and the client has pension funds of £150,000.

The client sets up a SSAS, transfers their pension funds to the SSAS, and contributes £50,000 to the SSAS to make up the difference. At this point the balance sheet of the SSAS contains only the bank account which has a balance of £200,000, A deal is struck with the owner of the unit, solicitors are appointed, and the SSAS buys the unit.

Going forward the assets of the SSAS is made up of the unit plus the bank account. Instead of rent being paid to the third party, it is paid, at market value, to the SSAS bank account, building up the client’s retirement fund for the future. Rent is paid tax-free and there is no capital gains tax on the property when it is eventually sold.

If the unit was owned by the business, and not a third party, it would be possible to purchase the unit off the business potentially freeing up cash for the business.

Tax-free and flexible

Another advantage of using your SSAS to purchase a property is potential tax savings. A SSAS is a tax-free environment, and no income tax is payable on the rent. This can be especially advantageous for higher rate taxpayers who typically face higher tax burdens on rent which is generated outside of a pension scheme.

In addition, when a property is sold, if it is within the SSAS environment, any growth in the capital value of the property is exempt from capital gains tax. This allows for tax-efficient growth on the property and potential wealth accumulation within the SSAS.

More details on SSASs, and the tax advantages can be found on the Government’s Money Helper website.

The ability to borrow

You can borrow up to 50% of the value of your pension fund to purchase a property. As an example, with a net fund value of £200,000, you can purchase a property of up to £300,000, including costs (1.5 x £200,000).

Rent generated from the property can then be used to repay the borrowing, increasing the value of the SSAS.

The ability to transfer your other pension arrangements and make contributions to a SSAS are both options which can assist in purchasing a property. Please contact us for more information on this.


It is possible to register a SSAS with HMRC for VAT. This can be useful when, for example, VAT will be charged on the purchase price.

Once registered, quarterly VAT returns will need to be completed for the SSAS via HMRC. Any VAT paid on the purchase price, or on VAT-able expenses made to improve the property, can be reclaimed. Once reclaimed, the funds would be paid into the SSAS bank account.

Any VAT which is payable on the rent will need to be included in the returns and paid in the normal way.

Property documentation, such as invoices and VAT receipts must be obtained to support the VAT recovery process.

Why Morhart?

We have extensive experience in helping clients using their SSAS to purchase a property. We can explain in simple terms what can and can’t be done and take you and your advisors through each step of the way to enable a smooth transaction.

If you would like to consider using your SSAS to purchase a property, please complete and return the Property Questionnaire.

If you would like to talk to us about SSAS or the possibility of setting up a SSAS please call us on 0117 457 7784 or e-mail [email protected].