Can I get a self-invested personal pension (SIPP) mortgage on a commercial property?
Purchasing a commercial property with a SIPP is possible through specialist lenders, and this comes with a number of benefits, such as…
- You will pay no capital gains tax if you sell the property
- You will pay no income tax on the rents you receive
- There might be no inheritance tax to pay when you pass the property on
Whether you’re purchasing on an owner-occupier or commercial investment basis, most lenders who offer commercial pension mortgages cap the loan at 50% of the SIPP value. For example, if your SIPP pension holds £300,000, you can borrow up to £150,000.
If you’re buying for investment purposes, the lender may ask for evidence that a lease is in place ahead of completion.
For owner-occupier deals, most lenders will assess the adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) of your business.
If you’re getting a business mortgage in retirement, your age should not be an obstacle as there are lenders who have no upper age limits, and will lend to a pensioner of any age, as long as you can prove you’re capable of keeping up with the mortgage payments.