SSAS and SIPP Mortgages, Pension Commercial Property Loans

What is a SSAS or SIPP mortgage?

A SSAS or SIPP mortgage is a commercial mortgage made to the trustees of a pension scheme to buy commercial property, often the premises of the member's own business, which the scheme then lets to the business at a market rent. The two schemes are a small self-administered scheme (SSAS), often misspelt SASS, and a self-invested personal pension (SIPP). Both are registered pension schemes under the Finance Act 2004, and both can own commercial property and borrow to buy it. The scheme is the borrower and repays the loan from the rent and its other funds, so the member and their business take on no personal debt. The lending itself works like any other commercial mortgage, with the pension rules on top.

Tax law sets the ceiling on the loan. A registered pension scheme can borrow up to 50% of its net assets, measured immediately before the borrowing, and anything above that is taxed (HMRC Pensions Tax Manual, PTM124000). A scheme with £300,000 of net assets can therefore borrow £150,000, whatever loan to value a lender might offer. A pension that buys residential property faces tax charges that can exceed half of what it cost, and every deal with the member or their business has to be at market value. From 6 April 2027 most unused pension funds, including property held in them, also count towards the member's estate for Inheritance Tax.

A SSAS is an occupational pension scheme set up by a company, usually for its directors or a few senior staff, who are also its trustees and decide how it invests. HM Revenue and Customs (HMRC) describes it as available for up to 12 members and often used by directors and family businesses (HMRC manual IHTM17022). A SIPP is a personal pension in which the member chooses the investments. The firm that operates it must be authorised by the Financial Conduct Authority (FCA), whatever the scheme holds (FCA Handbook, PERG 12), and the property is held by the SIPP's trustee, usually a company connected with the provider, acting on the member's instructions. A SSAS can also lend to the company that sponsors it, which is known as a loanback; a SIPP cannot.

A loan to pension trustees secured on commercial property is not a regulated mortgage contract. That definition needs at least 40% of the land to be used as a dwelling (Regulated Activities Order, article 61), and credit secured on land that is less than 40% residential is exempt from consumer credit regulation (article 60D). The pension scheme has its own regulators: the FCA regulates personal pensions such as a SIPP, and The Pensions Regulator protects workplace schemes, which include a SSAS (The Pensions Regulator: what we do).

Mortgage Lane arranges commercial mortgages for SSAS and SIPP trustees: for business owners moving their premises into their pension, schemes buying property let to other tenants, several pensions buying one building together and schemes refinancing property they already own. We work alongside the scheme administrator or SIPP provider, the members' financial adviser and the lender's pension team. We do not give pension or tax advice. Whether a pension should buy property at all is a question for a financial adviser authorised to advise on pensions, and the scheme administrator confirms what the scheme's rules and HMRC's rules allow. A director borrowing personally for a home is covered on our mortgages for limited company directors page.

SSAS and SIPP mortgage rates

SSAS and SIPP mortgages are priced as commercial mortgages, by each lender, on the property, the tenant and the loan. A variable rate is usually a margin over Bank Rate or another reference rate, and some lenders also offer fixed rates. The margin depends on the type of property, the tenant's financial strength (its covenant), the length of the lease and the loan to value. Because the 50% rule usually holds a pension loan to a modest share of the price, many pension cases sit at a low loan to value, which can help the pricing. Some lenders offer capital repayment and interest only terms.

Some commercial lenders do not lend to pension trustees at all. Those that do ask for the scheme's trust deed and rules, the administrator's or provider's consent and a lease on commercial terms, and they set their own arrangement and valuation fees. SIPP providers and SSAS administrators charge separately for property work, and all of these costs come out of the scheme's funds. A long lease to a tenant with sound accounts usually helps both the valuation and the price of the loan, as our guide to whether a commercial property is worth more with a tenant explains.

Thinking of moving your business premises into your pension? Get in touch with the scheme's latest net asset value, the property details and the proposed lease. We check the borrowing limit with the administrator before the scheme commits to a price.

SSAS and SIPP mortgage criteria

A pension loan is assessed on the scheme's own finances as well as on the property. Five rows in the table rest on published rules, as at October 2026: the borrowing limit (HMRC), property and residential property (the Finance Act 2004), VAT (HMRC and the land tax authorities) and regulation (the Regulated Activities Order). The term row is Mortgage Lane's experience. The loan to value, tenant, affordability and scheme consent rows describe how lenders and scheme providers differ, and the lender's underwriting decides each case. Each lender tests the rent against the loan payments in its own way, often with a cover ratio such as a debt service coverage ratio, and our guide to how affordability is calculated on commercial mortgages sets out the usual tests.

Types of pension property purchase, and how each is assessed

The tax rules are the same for a SSAS and a SIPP, and the cases differ mainly in who sells the property and who rents it.

SSAS buying the company's premises

The usual case is a company whose directors are members and trustees of its SSAS. The SSAS buys the premises the company trades from, either from a third party or from the company itself, and grants the company a lease at a market rent. The company can normally deduct rent for premises it trades from as a business expense (HMRC Business Income Manual, BIM46801), and the scheme pays no income tax on most investment income, including rent (gov.uk: tax on investments for pension trustees). The rent then repays the loan. The company and the scheme are connected, so the price, the rent and the lease terms all have to be at market value and on commercial terms. An independent valuer, usually a RICS registered valuer, reports the market value and the market rent, which gives the trustees the evidence they need. The premises may be an office, a shop, a warehouse or an industrial unit, and our guide to a mortgage for a business property covers the same premises bought by the company itself.

Get in touch with the SSAS accounts and the property details.

SIPP buying the member's business premises

The same structure works in a SIPP. The SIPP trustee buys and holds the property on the member's instruction and lets it to the member's business, which can be a sole trader, a partnership or a company. SIPP providers set their own rules on whether they accept commercial property, borrowing and a tenant connected with the member, and their property administration fees vary. The provider's property terms are the first thing to check, because a provider that will not accept the structure ends the case before any lender is involved.

Get in touch with your SIPP provider's property terms.

Selling your premises to your pension

A business owner, or their company, can sell premises they already own to their SSAS or SIPP at market value. The business receives cash and goes on using the building as the scheme's tenant. The sale is a disposal for the seller: an individual may owe capital gains tax on any gain, and a company pays corporation tax on its chargeable gain. The scheme pays the land tax as the buyer, and VAT can apply where the seller has opted to tax the building, as the land tax and VAT section below explains. If the price is not the market value, HMRC treats the difference as an unauthorised payment and taxes the member or the employer, and the scheme administrator, on it.

Property can also go into a scheme as an in specie contribution, but HMRC gives tax relief only on contributions of money. For the transfer to count, there has to be a binding obligation to pay a fixed sum, a separate agreement for the scheme to buy the property at market value, an agreement that the contribution debt is set off against the price, and documents written at the time showing each step (HMRC manual PTM042100). The scheme administrator and a tax adviser confirm whether relief is available before anything is signed.

Get in touch with the property, its value and the seller's position, and involve the scheme's tax adviser early.

Pension investment property

A scheme can buy commercial property let to tenants with no connection to the member, purely as an investment. The lender assesses the tenant's covenant, the length of the lease and how easily the property would relet, as for any commercial investment loan, and the valuer may value it on its rental income, as an investment valuation. A full repairing and insuring lease, under which the tenant pays for repairs and insurance, keeps those costs out of the scheme. A surgery or clinic let to a medical practice is one example, and our guide to a mortgage for a medical practice covers the healthcare side.

Get in touch with the lease and the tenant's accounts.

Pooled SIPPs and a SSAS with several members

Where no single pension is large enough, some SIPP providers allow several SIPPs to buy a property together, each owning a share, and a SSAS can pool the funds of its members. HMRC applies the 50% test to each money purchase arrangement separately (PTM124000), so each member's pot can borrow only against its own value, and the scheme administrator works out what each can take. Joint owners need an agreement on what happens when one of them retires, dies or wants to sell, and some lenders ask to see it.

Get in touch with each member's fund value.

Refinancing property the scheme already owns

A scheme can move an existing loan to a new lender, or borrow against property it already holds to fund another purchase. Replacing a loan without increasing it needs no new test against the 50% limit, and a change of lender, term or rate would not normally, by itself, count as new borrowing. Any increase is tested, and HMRC counts unpaid interest added to the new loan as part of the increase. When the property is already in the scheme, its value counts in the net assets for the test, which is not the case on a purchase.

Get in touch with the existing loan statement and the scheme's net assets.

Mixed-use property and the flat above the shop

A shop with a flat above it that has its own entrance, connected at most by a shared hallway, counts as two buildings for the pension rules: the shop is commercial and the flat is residential property. Where the two are interconnected, HMRC treats the whole building as residential, because it is suitable for use as a dwelling (HMRC manual PTM125200). Where the flat is separate, a scheme can buy the shop and leave the flat outside the pension, or buy both if the flat meets one of the two exceptions in the next section. A mixed-use building bought outside a pension follows our semi-commercial mortgages page.

Get in touch with the floor plans and how each part is used.

What a pension can and cannot buy

A registered pension scheme can own commercial property, and residential property brings tax charges that can come to more than half of what it cost. The rules are in Schedule 29A to the Finance Act 2004 (legislation.gov.uk). They apply to an investment-regulated pension scheme, which covers a personal pension where the member, or someone connected with them, can direct or influence the investments, and an occupational scheme with 50 or fewer members where a member can. In practice that includes a SIPP and a SSAS.

What a pension can buy

A pension can buy offices, shops, industrial units, warehouses, workshops, surgeries, commercial and agricultural land and car parks, freehold or leasehold. Some buildings that people live in are not residential property for these rules: a care home, a hospital or hospice, a children's home, a prison, a student hall of residence linked to one college or university, and a whole hotel (PTM125200). An interest in only part of a hotel, such as a lease of a room or timeshare rights, is treated as residential, so a pension buys the whole hotel, alone or as a joint owner of the whole. Lending on a whole hotel is covered on our hotel mortgages page.

What counts as taxable property

Residential property is taxable property: a house, a flat, a holiday let, a buy to let, a beach hut, and the garden or grounds that go with a dwelling. If an investment-regulated scheme acquires it, the member pays an unauthorised payments charge of 40% on the cost, a 15% surcharge can be added, and the scheme administrator pays a scheme sanction charge, generally 15%. After that, the scheme administrator pays 40% each year on the income from the property, or on a deemed income of 10% of its value if that is higher, and 40% on any gain when it is sold (HMRC manual PTM125300). Tangible moveable property, such as cars and furniture, is taxable property too.

Two exceptions take a dwelling outside the charges, and both need an occupier with no connection to the members. The first is a home lived in by an employee who must live there as a condition of the job, such as a caretaker's flat, where the employee is also not connected with the employer. The second is a home lived in by someone in connection with business premises the scheme holds, such as the flat above a shop the scheme owns, lived in by the unconnected trader who runs the shop (Schedule 29A, paragraph 10). A member or their family cannot live in the flat.

Deals with the member and their business

Any purchase from, sale to or lease to the member, their relatives or a company they control has to be on an arm's length, commercial basis. Otherwise HMRC taxes the difference between the market value and the amount paid or received as an unauthorised payment, charged on the member or the employer and on the scheme administrator (gov.uk: tax on investments for pension trustees). The independent valuation of the price and the rent is what shows the deal is at market value.

The 50% borrowing limit for SSAS and SIPP schemes

A registered pension scheme can borrow up to 50% of its net assets, measured immediately before the borrowing, and borrowing above that limit is a scheme chargeable payment. Net assets are what the scheme holds less what it owes. The property being bought is left out of the value, because the scheme does not own it yet, and borrowing the scheme still owes counts against the limit (HMRC manual PTM124000). HMRC's own example is a scheme with £200,000 of assets and a £50,000 loan. Its net assets are £150,000, its total borrowing can be £75,000, and so it can borrow £25,000 more. The excess over the limit is taxed at 40% as a scheme sanction charge, which the scheme administrator pays, and borrowing above the limit has to be reported to HMRC.

The test is made each time the scheme borrows. A later fall in the value of the scheme's assets does not cause a breach, although new borrowing taken while the scheme is already over the limit is charged in full. For money purchase arrangements, which include every SIPP and a SSAS run on money purchase lines, HMRC applies the test to each member's arrangement separately, and for defined benefit arrangements to the scheme as a whole. A scheme can borrow from a bank or another lender, or from a member or the sponsoring employer, but borrowing from a member, the employer or anyone connected with them has to be at a commercial rate. Rules under the Pensions Act 2004 can limit borrowing further for some occupational schemes.

The table shows what the limit means for the largest purchase a scheme could make with no other borrowing, putting in every pound it has.

In every row the loan is one third of the price, because the scheme can borrow only half of what it already holds. On a purchase of that size the 50% rule and the scheme's own cash decide what it can buy before any lender's loan to value limit comes into play. A scheme that spends everything also has nothing left for running costs or a gap between tenants. Our calculator works the figures for any scheme, including one that still owes money on an earlier loan.

Stamp duty, land tax and VAT on a pension purchase

A pension scheme pays land tax on a purchase as any other buyer does, at the non-residential rates of the nation where the property is. In England and Northern Ireland that is Stamp Duty Land Tax (SDLT), in Scotland Land and Buildings Transaction Tax (LBTT), collected by Revenue Scotland, and in Wales Land Transaction Tax (LTT), collected by the Welsh Revenue Authority. The rates in the table are for a freehold purchase or the price paid for an existing lease, as at October 2026 (gov.uk: SDLT non-residential rates; Revenue Scotland: non-residential LBTT; Welsh Government: LTT rates and bands). A new lease also carries tax on the rent, worked out separately. In England, Northern Ireland and Scotland a purchase of mixed-use property also uses the non-residential rates.

Commercial property can also carry VAT. The sale of a commercial building more than three years old is normally exempt, but where the seller has opted to tax it, or the building is new, VAT at 20% is charged on the price (HMRC VAT Notice 742). The sale of a let building can fall outside VAT as a transfer of a going concern, but only if the buyer opts to tax, tells HMRC in writing by the relevant date, and is registered for VAT or required to be (VAT Notice 700/9). For a pension fund, the trustee that holds the legal title is the one that opts to tax and registers (VAT Notice 742A). A scheme that has opted can normally reclaim the VAT it paid on the purchase and then charges VAT on the rent, so the VAT costs the scheme cash until HMRC repays it.

SDLT is worked out on the price including any VAT, even where the VAT is later reclaimed (gov.uk: what to include in an SDLT calculation), and LBTT and LTT follow the same rule (Revenue Scotland guidance LBTT2002 and Welsh Government guidance LTTA/2310). That extra land tax is not recoverable. A VAT bridging loan is also borrowing like any other, so it counts towards the same 50% limit as the mortgage. Our VAT bridging loans page explains how the VAT gap is funded outside a pension, and Step 3 of the worked example below shows the effect inside one.

SSAS loanback

A SSAS can lend money to the company that sponsors it, within conditions in the Finance Act 2004, and a SIPP cannot lend to the member or to any business connected with them. A loan that meets every condition is an authorised employer loan (Finance Act 2004, section 179), and HMRC sets out the conditions in its manual (PTM123200):

• The loan is no more than 50% of the scheme's net assets immediately before it is made.
• It is secured for its whole term by a first charge on an asset, owned by the company or by someone else, worth at least the loan plus interest when the loan is made.
• The interest rate is at least 1 percentage point above the average base lending rate of six banks named in HMRC's regulations, with the average rounded up to the nearest 0.25%.
• It is repaid within five years, in at least equal yearly instalments of capital and interest. If money is still owed on the repayment date, the date can be put back once, by up to five more years. HMRC's manual gives the example of an employer in genuine difficulty with the repayments.

A loan that fails any condition is an unauthorised payment, with a 40% charge on the company and a scheme sanction charge on the administrator. A SIPP is a personal pension with no sponsoring employer, so a loan from a SIPP to a company connected with the member is taxed as an unauthorised payment to the member.

The loanback limit and the borrowing limit are separate tests on the same net assets. A SSAS with £300,000 could lend its company up to £150,000, and could also borrow up to £150,000 towards a property, but money lent to the company is no longer available to put towards a price. The company can use the money for working capital or towards a purchase of its own. Where it buys premises in its own name with loanback money towards the deposit, the loanback needs its first charge on a different asset, because the mortgage lender takes the first charge on the property. For a company borrowing outside the pension, our revolving credit mortgages and business bridging loans pages cover facilities secured on business property. The FCA warns savers to be wary of an unexpected offer to move a pension into a new SIPP or SSAS, particularly where a limited company has to be set up (FCA: protect your pension pot).

Inheritance Tax on pensions from April 2027

From 6 April 2027 most unused pension funds and pension death benefits, including commercial property held in a SSAS or SIPP, count towards the member's estate for Inheritance Tax. The change is in sections 66 to 71 of the Finance Act 2026, which received Royal Assent on 18 March 2026, and it applies to deaths on or after 6 April 2027 (Finance Act 2026, section 71). The personal representatives are liable to report and pay the tax on the pension. Death in service benefits from a registered pension scheme are excluded, and benefits passing to a surviving spouse or civil partner, or to a charity, stay exempt. In limited circumstances the personal representatives can direct the scheme administrator to withhold benefits and pay the tax, and while that happens beneficiaries can take only 50% of the death benefits for up to 15 months after the death (gov.uk: Inheritance Tax on unused pension funds).

Inheritance Tax is due by the end of the sixth month after the death. A scheme whose main asset is a building cannot easily sell part of it, and a sale or a new loan takes time, so a pension that holds property may have a gap between the tax falling due and the money being available. The change leaves the borrowing limit, the residential rules and the tax treatment of the rent as they are. It does change the case for keeping a building in a pension until death, and that is a question for the scheme administrator and a financial adviser authorised to advise on pensions, with a solicitor or tax adviser on the estate. Our probate loans page covers how estates meet a tax bill before the assets can be sold.

How a SSAS or SIPP mortgage is arranged

1. The scheme and the property. The administrator or SIPP provider confirms the net asset value, any borrowing still owed and whether the scheme's rules allow the purchase and the loan. The property is checked against the residential rules, and the borrowing limit is worked out before a price is agreed.
2. Valuation and the lease. An independent valuer reports the market value and the market rent, and the lease to the business is drafted on commercial terms.
3. Lender terms. We approach commercial lenders that lend to pension trustees with the scheme documents, the valuation and the draft lease, and the chosen lender issues terms to the trustees.
4. Provider and legal work. The SIPP provider, or the SSAS trustees and administrator, approve the purchase, the lease and the loan. Solicitors act for the scheme, the lender and any connected seller or tenant, and the trustees opt to tax and register for VAT where the property needs it.
5. Completion and after. The scheme's funds and the loan pay the price, the land tax and the costs, the lease starts and the rent is paid into the scheme's bank account, from which the loan payments are made. The limit is checked again on the completion figures, because any borrowing above 50% would be taxed and would have to be reported to HMRC.

The lender's side of the process, from valuation to completion, is set out in our commercial mortgage guide.

Buying your premises through a SSAS: the arithmetic

In a pension purchase the tax rules set the loan, and the scheme's cash is usually what runs out first.

Step 1. The scheme and the property

An illustrative SSAS with £300,000 of net assets and no existing borrowing buys its sponsoring company's premises in England from the company at their market value of £400,000. Legal, valuation, lender and administration costs are taken as £6,000 for the example, and the premises have not been opted to tax.

The scheme borrows the full £150,000 the 50% rule allows, a loan to value of 37.5%, and pays £265,500 from its own funds. It is left with £34,500.

Step 2. The rent and the loan

The valuer sets the market rent, taken here as £28,000 a year for the example. Over a 15-year term at 5.2%, the illustrative rate used across our guides and not a product rate, the £150,000 loan costs £14,423 a year in capital and interest, about £1,202 a month. The rent covers the payments about 1.9 times and leaves £13,577 a year in the scheme before its own running costs. The company can normally deduct the rent from its taxable profits, the scheme pays no income tax on it, and the company has received £400,000 for the building, with corporation tax due on any gain. The same purchase would carry £8,500 of LBTT in Scotland and £7,750 of LTT in Wales.

Step 3. If the building had been opted to tax

Had the company opted to tax the premises, VAT of £80,000 would be added to the price. The sale would not normally be a transfer of a going concern, because the company occupies the premises itself and has no letting business to transfer. SDLT is then worked out on £480,000, which makes it £13,500, and the total cost rises to £499,500.

With the same £150,000 loan the scheme needs £349,500 of its own cash, £49,500 more than its £300,000 of net assets. The trustees can opt to tax, register for VAT and reclaim the £80,000, but only after it has been paid, and the extra £4,000 of SDLT stays a cost. A VAT bridging loan would count towards the same £150,000 limit that the mortgage already uses. The scheme would need more of its own money, such as further contributions, before it could complete, so the VAT position needs settling before a price is agreed.

Step 4. A smaller pension

A SIPP with £120,000 of net assets can borrow £60,000, which supports a purchase of at most £180,000 before costs, so it cannot buy the same £400,000 premises alone: on the Step 1 figures it would be £235,500 short. Three SIPPs of £120,000 each could buy it together where their providers allow joint ownership. Each can borrow up to £60,000 against its own value, so together they could take the same £150,000 loan, £50,000 each, and pay £88,500 each of the £265,500 cash, leaving each with £31,500. The other route is to build up the fund with further contributions before buying.

Illustrative arithmetic on hypothetical figures. The land tax is at the non-residential rates as at October 2026, and the rent, costs and rate are assumptions. Not tax or pension advice, and not an offer of finance.

What decides the case

The scheme's net assets fix the most it can borrow, and its cash after land tax, VAT and costs decides whether the purchase works. The trustees control the price, which has to be the market value, the terms of the lease and how much money they leave in the scheme for a void or for benefits. Confirm the net asset value with the administrator before agreeing a price, and cost the purchase with the land tax and any VAT included. Members who expect to hold the building for life should also plan for the April 2027 Inheritance Tax change.