Updated: November 18, 2019

Purchasing Land with a SIPP

What are the rules for buying land and holding this asset within a SIPP? Find out how it all works in this detailed guide.

Get Started
Ask A Quick Question

Ask A Quick Question

We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in pensions. Ask us a question and we'll get the best expert to help.

FCA Logo
1 of 2
2 of 2 Send!

No impact on your credit score

Tony Stevens

Author: Tony Stevens - Finance Expert

Updated: November 18, 2019

If all or part of your pension assets are held in a Self-Invested Personal Pension (SIPP), then you may be interested in adding new and different investments to it. Among those pension investment choices you have is to add land to your SIPP portfolio.

However, while you can buy land with your SIPP, or use your SIPP savings to borrow against to purchase or invest in land, it’s important that any land you buy isn’t for residential use and if possible, that it has some commercial link and can earn an income.

Understanding the rules of buying land, be it woodland, agricultural land or other types of commercial land, with your SIPP isn’t always easy.

That’s why we would always suggest that you speak with an expert. But to give you a better idea of the type of land you can and can’t buy with your SIPP, we’ve written this article.

In it we’ll discuss:

Can I use a SIPP to buy land?

The nature of a SIPP is that it can be used to make a wide range of investments and that includes the purchase of land. However, there are rules in place to make sure the land you buy with your SIPP can offer the type of return that’s suitable for your pension.

It’s also important to remember that while the land you buy through your SIPP should be commercially viable, you can’t own residential property in this type of pension.

So, while you can purchase land that will eventually become a residential development, you must sell it before any construction work towards that residential development takes place.

But, residential properties are far from the only way land can be commercially successful or developed. This means there are many options available to you to buy land with your SIPP.

Speak to a expert today

Get Started

Can I purchase agricultural land with my SIPP?

If you would like to diversify your SIPP savings by investing in agricultural land, then you’ll be pleased to hear this is an option. Of course, there are some rules you must adhere to when buying land or any type of property with your SIPP.

They include:

  • Your SIPP cannot directly hold residential property.
  • Any land you buy with your SIPP must be managed commercially.
  • A surveyor or valuer must agree that you’re purchasing the land at or below market value.

With these rules in mind, it’s clear that although buying agricultural or farmland with your SIPP is permitted, your SIPP can’t be the direct owner of residential property on that agricultural land.

Of course, not all agricultural land includes the homes of the people who manage the land. In addition, agricultural land can include access roads or even land that could be developed further, once the correct planning permission has been obtained. But, if you go down that route, you would need to sell the land before any residential development work were to begin.

If you’re interested in buying agricultural land with your SIPP but are unsure of the specific rules, then you could get in touch with us and speak with an expert.

A reliable pension or SIPP advisor can answer all your questions relating to buying land through your SIPP.

They can also help you identify the right type of land for your SIPP and future plans.

Is it permitted to buy woodland with a SIPP?

Yes, provided it satisfies the rules of your SIPP, it is possible to purchase woodland through it. That means showing the woodland you wish to buy is commercially managed and doesn’t include residential property.

Some investors choose to buy woodland for or with their SIPP that can deliver an income from its commercial standpoint. This could be through the sale of timber or possibly as an attraction where visitors pay to enter it.

Can a SIPP be used to invest in other types of land?

Of course, agricultural and woodland aren’t the only types of land that is available for purchase and nor are they the only types of land you can buy and invest in with your SIPP. We’ve already mentioned buying land that could be used for developments is an option, provided you sell the property before any residential construction work begins.

Other types of land that you could buy with your SIPP are:

  • Land used for the shooting of game or other animal sports.
  • Access roads to quarries or other large commercial sites.
  • Land that could be developed into sporting event sites.
  • Even land that can be used as a car park or another commercial option.

But, if you’re unsure that the land you’re considering buying with your SIPP, whether its agricultural land, woodland or land suitable for a different commercial venture, it makes sense to speak with an expert pension advisor, experienced in SIPPS and land purchases.

 

Speak with a SIPP expert about land investments

If you’re interested in buying land with your SIPP, whether its agricultural land, woodland, or a different type of commercially viable option, it can be a good idea to speak with an expert.

Call us on 0808 189 0463 and we’ll connect you with the right SIPP advisor for your SIPP land purchase needs.

Ask A Quick Question

We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in pensions. Ask us a question and we'll get the best expert to help.

FCA Logo
1 of 2
2 of 2 Send!
Tony Stevens

Tony Stevens

Finance Expert

About the author

Tony has worked in a vastly diverse array of areas in the pensions industry for over 20 years. Tony regularly writes for trade press, usually on topical and pensions pieces as well as acting as a judge at prestigious national events.

Tony is also a highly qualified Independent Financial Adviser in his own right. His mantra has always been “Hope for the best, but plan for the worst”, and believes that the biggest impact that an adviser can have on a client’s life journey is to take them on a journey from generally having little or no real idea of what their retirement will look like, to giving them the understanding of what their retirement looks like now, then helping them navigate a path to what they want their retirement to be.

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

Get Started