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Is it possible to buy land using a pension?

Hi all,
I have an end of terrace property in Kent and have the potential opportunity to buy a slice of land to add to the side of the property. Due to interest rates increasing vs (and personal circumstances) I’m looking at more efficient ways to fund it (25k ish). Is it possible to purchase land using a pension?
I understand you can buy commercial property using a pension/SIPP under the stipulation that rent must be paid. If this isn’t possible to buy residential land.., can converting to “commercial land” satisfy a sipp?
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  • user1977
    user1977 Posts: 13,297
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    Not sure what you mean by "converting to commercial land"? What are you actually going to be using the land for?
  • Bartoni79
    Bartoni79 Posts: 97
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    edited 5 January at 10:01AM
    Land will be added to the existing plot as a garden but if I built a garage on it and rented it, could it be considered commercial land?
  • user1977
    user1977 Posts: 13,297
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    The garage might be (if it's purely a commercial letting proposition), the garden won't.
  • Bartoni79
    Bartoni79 Posts: 97
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    Ok. Is it possible to buy residential land using a sipp?
  • user1977
    user1977 Posts: 13,297
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    Bartoni79 said:
    Ok. Is it possible to buy residential land using a sipp?
    No, residential property isn't (AFAIK) permitted.
  • Albermarle
    Albermarle Posts: 21,079
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    Bartoni79 said:
    Ok. Is it possible to buy residential land using a sipp?
    No it is not as far as I know.

    Even for commercial property you can not use one of the standard low cost on line SIPP's.
    You have to have a 'Full SIPP' and it is usually recommended that you get some professional advice as it can get complicated.
  • ProDave
    ProDave Posts: 3,614
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    How much is in your SIPP?  Have you started drawing it as any form of pension yet?  How old are you?

    If you are not yet drawing it, and you are 55 or older, you can put it into a drawdown SIPP and take 25% of the fund tax free for any use.  I did this to partly fund a self build.  And then after that you can draw any amount of the remainder from your drawdown SIPP but that is treated as income and taxed.

    The trick is to be wise enough that you don't draw too much and leave yourself short on pension income.

    You can still keep the remainder left in the drawdown SIPP invested and you can still contribute to the SIPP but once you have started drawing it there are limits on how much you can pay in.
  • k12479
    k12479 Posts: 700
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    Albermarle said:
    You have to have a 'Full SIPP' and it is usually recommended that you get some professional advice as it can get complicated.
    Bartoni79 said:
    Land will be added to the existing plot as a garden...
    The additional plot would belong to the SIPP, wouldn't it? So adding it to the existing plot, at least officially, wouldn't be possible, complicating matters even further.
  • Bartoni79
    Bartoni79 Posts: 97
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    ProDave said:
    How much is in your SIPP?  Have you started drawing it as any form of pension yet?  How old are you?

    If you are not yet drawing it, and you are 55 or older, you can put it into a drawdown SIPP and take 25% of the fund tax free for any use.  I did this to partly fund a self build.  And then after that you can draw any amount of the remainder from your drawdown SIPP but that is treated as income and taxed.

    The trick is to be wise enough that you don't draw too much and leave yourself short on pension income.

    You can still keep the remainder left in the drawdown SIPP invested and you can still contribute to the SIPP but once you have started drawing it there are limits on how much you can pay in.
    Im 50 and I have about 30k in the sipp so im not able to draw down. 

  • Bartoni79
    Bartoni79 Posts: 97
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    @k12479 - I guess if it was possible it would be a separate title. I assume it won’t be a problem now but it would be tricky if I came to sell?
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