Can a SSAS buy residential property?

The tax rules do not forbid it, and the charges that apply are severe. Residential property is taxable property, and buying it triggers charges on the member, on the scheme, and again every year it is held.

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The tax charges

40% on the member
The purchase price plus acquisition costs is treated as an unauthorised payment and charged on the member.
A further 15% surcharge
Where unauthorised payments in a twelve month period reach 25% of the member's pension rights, taking the total to 55%.
A scheme sanction charge
Up to 40% on the scheme administrator, which cannot be reduced below 15% of the payment.
An annual charge afterwards
Each year the scheme is taxed on the greater of the actual profits or deemed profits of 10% of the property's value.

What else counts as taxable property

Residential property bought by a pension scheme brings a 40% charge on the member, a possible 15% surcharge, a scheme sanction charge, and a further charge every year it is held.

Related questions

What about a flat above a shop?

The answer for a mixed-use building turns on the detail of the title and the use.

Can the scheme buy my trading premises?

Commercial property, yes. The company can then pay rent to the scheme, which has to be at a commercial level.

Can it buy a holiday let?

A dwelling is residential property whatever it is used for, so the same charges apply. There are narrow exceptions for certain job-related and institutional accommodation, and a holiday let does not fall within them.

Can I buy the property from the scheme later?

A sale to a member, the employer or a connected person has to be at market value. Any difference is an unauthorised payment.

Calculators

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Where this fits

Ask us before a pension scheme commits to buying a property, because the charges cannot be recovered afterwards.

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The advisers for this subject

Sunny Bharj

Sunny Bharj

Independent Financial Adviser

Tony Springer

Tony Springer

Independent Financial Adviser

Advising through Equity & General Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority. Check the firm on the FCA register under number 474163.

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