Buying Commercial Property in Your SIPP and How to Finance It

Learn how to buy a commercial property through your SIPP, the tax advantages, and how to finance it with a commercial mortgage. Expert advice from Lime FS.

November 19th, 2025

Buying a commercial property through a SIPP

Buying a commercial property through a SIPP (Self-Invested Personal Pension) can be a powerful way to grow your retirement savings while giving your business a valuable asset. At Lime FS, we regularly help clients structure and finance property purchases through SIPPs using commercial mortgages.

Below, we explain how it works, what to consider, and key tips to secure the right finance deal.

We work with IFAs and Financial Advisors who will provide the pension advice to you, we deal with the lending aspect.

What Is a SIPP?

A Self-Invested Personal Pension (SIPP) is a type of pension that allows you to choose and manage your own investments — including commercial property. Unlike standard personal pensions that limit you to funds or shares, a SIPP offers more flexibility and control.

When structured correctly, buying commercial property through a SIPP can offer tax advantages, including:

No Capital Gains Tax (CGT) on property growth
Tax-free rental income within the SIPP
Corporation tax relief for your business if it rents the property from your SIPP at market rate

Bear in mind that the rules on SIPPs change and you should always seek the advice of a qualified IFA.

What Types of Property Can a SIPP Buy?

Your SIPP can buy commercial property, such as:

Offices
Warehouses
Shops
Industrial units
Land for development (subject to SIPP provider rules)

Note: You cannot buy residential property through a SIPP — this is commonly asked and is not something allowed under current HMRC rules

The Process of Buying a Commercial Property in a SIPP

Identify the property you wish to purchase.
Check SIPP provider rules — each may have slightly different criteria.
Obtain a property valuation and ensure it’s suitable for SIPP ownership.
Set up your SIPP (if not already done).
Arrange funding, which can be a mix of:
- Existing pension funds
- A SIPP commercial mortgage (borrowing up to 50% of the SIPP’s net assets)
Purchase the property — the SIPP becomes the legal owner.
Lease the property to your business or a third party, paying rent into the SIPP.

It is worth bearing in mind that any SIPP Commercial Mortgage has to make sense and be affordable. This will be checked by the lender and the Trustees of the SIPP. It makes sense to know your mortgage costs as early as possible.

Financing the Purchase: SIPP Commercial Mortgages

If your SIPP balance isn’t large enough to fund the entire purchase, you can use a SIPP commercial mortgage. This is where we come in.

How It Works

SIPPs can borrow up to 50% of the net value of the pension.
The loan is secured against the property itself.
The SIPP, not you personally, takes out the mortgage.

For example:
If your SIPP is worth £200,000, it can borrow an additional £100,000 — allowing a total purchase budget of £300,000.

Note: The amount the SIPP can borrow is driven by the value of the pension fund, not the property you are buying. Typically you could borrow up to 70% of a property value, subject to any mortgage not being more than 50% of the current pension pot value.

Tips for Securing a SIPP Commercial Mortgage

Work with an experienced broker
Specialist advice is key. Lenders assess SIPP loans differently, and Lime FS can help you navigate this niche market.
Ensure affordability from rental income
Rent paid into the SIPP (by your business or tenant) should comfortably cover the mortgage repayments.
Plan for liquidity
Remember that property is an illiquid asset — keep some cash in your SIPP for fees and maintenance costs.
Compare lender terms
Rates, loan-to-value, and fees vary widely. Independent advice helps ensure the mortgage fits your strategy.
Seek tax and legal advice early
Proper structure can protect your pension from tax pitfalls and ensure compliance with HMRC rules.

In most cases it can be a chicken and egg scenario when it comes to collating pension pots into a SIPP versus getting a SIPP Commercial Mortgage agreed. This is where it really helps for us to work closely with your IFA.

Why Use Lime FS?

At Lime FS, we specialise in commercial finance and SIPP property purchases, working closely with pension trustees and lenders to make the process smooth and compliant.

We can help you:

Structure your SIPP commercial mortgage correctly
Source competitive SIPP mortgage rates
Liaise with your accountant, solicitor, SIPP provider and Financial Advisor

Get in touch with Lime FS today to discuss your commercial property investment and financing options.

FAQs

Can my SIPP buy a property my company already owns?

Yes, your SIPP can purchase your company’s premises at market value, freeing up capital for your business while retaining the property within your pension.

Can I use multiple SIPPs to buy one property?

Yes — it’s possible for multiple SIPPs (e.g., you and business partners) to jointly buy a property, each owning a proportionate share.

Who pays the rent if my business occupies the property?

Your business pays rent directly to the SIPP at a market-rate lease. This rent is tax-deductible for the business and tax-free within the pension.

Can a SIPP borrow more than 50%?

No — HMRC strictly limits borrowing to 50% of the SIPP’s net assets.

David Farmer

Over 30 years finance experience. Former credit underwriter, founder of Lime Finance Solutions in 2012. Multi Award winning business, featured in Sunday Telegraph, Parliamentary Review, Sky TV and others. Regular contributor to press and business associations. FCA Authorised, ALIBF Qualified. Specialist in Commercial Mortgages, Business Lending, Property and Development Finance.