Your pension fund gives you the option to buy and invest directly in a diverse range of property related assets, including land and buildings. For example:
Having the ability to access lending may be extremely important to enable you to purchase the property asset you require. Subject to meeting the lending criteria you pension fund may borrow up to 50% of its value.
Another attraction is the ability for you and other pension plan holders to pool funds to buy a commercial property as a joint investment. This increases the size and value of the assets under consideration.
With our experience we can show you the many advantages of purchasing commercial property assets through your pension.
A business owner has several pensions worth £100k, which are consolidated into the Pension Plan. In addition, the business has surplus cash of £100k earning minimal interest and this amount is transferred as a pension contribution into the business owner’s Pension Plan. The Pension Plan purchases a commercial property at a price of £250k for use by the business and takes out a mortgage for £100k, 50% of the Pension Plan’s assets.
The business rents the property and the rental payments less the mortgage repayments can be used to top up the Pension Plan.
Fees can vary significantly dependent on the complexity or otherwise of the property. Broadly the fees will include:
All the above fees would payable from your Pension Plan.
Of course, every purchase has its own unique circumstances and challenges, but the fundamental steps and procedures will be similar in most cases.
This flow chart shows how the process would play out in most cases:
In summary, there are many advantages in purchasing property assets through your pension. As specialists, Advizertech will provide expert advice and help you at every step along the way.
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