Why You Should Move Your Residential Portfolio to Commercial
It would be fair to say that anybody who’s been investing in residential property over the last few years, such as buy-to-let, has experienced first-hand how the landscape for owning residential property has deteriorated. This is due to many factors, from the changing tax system and government tax break restrictions to fluctuating interest rates. As a result of the economic climate, actually owning residential property has become very difficult indeed.
The Struggle of Owning Residential Property
There are many challenges, in today’s current landscape, of owning residential property. The cost of residential mortgages in particular has been slightly prohibitive in the last couple of years. Despite being considered an asset investment, residential properties have turned out to be generally fairly poor.
There are one or two sectors in the residential market that are still moderately attractive. HMO's come to mind because you can generate so much more profit from one property. However, in general, a lot of landlords are starting to sell their stock and bail out of this particular investment asset class.
Why You Should Invest in Commercial Property
If you are in a similar situation, perhaps it’s time to consider moving into commercial property ownership. When you start to look at commercial property as an investment option, you will start to see that it is a very attractive place to be. Here are just a few of the benefits:
Long-term Tenants Enhancing the Property’s Value
Commercial leases are usually for many years, so you will typically have a stable tenant and rent rolling in every month for the longer term.
What’s more, the tenant is responsible for property repairs and maintenance. So, for example, you could have a tenant in your commercial property who wants to make some improvements to the property. They would pay for these improvements, ensure they’re carried out to a high standard, and you will benefit from the enhanced property value.
Reduced Landlord Responsibilities
When you're comparing leases between commercial and residential property, there are fewer responsibilities on you as a landlord when you have commercial property. Your tenants take care of the property and you collect the rent. It’s as simple as that. And when you let us manage your property for you, your workload is reduced even further.
You Can Add Commercial Property into a SSAS Pension
You can put your commercial property into a SSAS pension scheme, without a doubt the best pension scheme there is for Limited Company owners. Check out our SSAS Video Hub to discover the benefits SSAS has to offer.
Tax Efficiencies within a SSAS
When you open a SSAS, your Company can make contributions for you. This means your contributions will be tax deductible and you could use that money to buy commercial property, therefore recycling your Company finances in a tax-efficient way.
If you can move your commercial property portfolio into a SSAS, then you’re moving it into a tax free zone. While holding a commercial property in a Limited Company is better than owning a property personally, you still pay Corporation Tax on rental profits. This is not the case within a SSAS Pension.
You will also be moving the property into a pension scheme that is exempt from Capital Gains and Inheritance Tax eliminating future tax problems.
Find Out More About Commercial Property Ownership Within a SSAS Pension
We have made numerous videos on owning property within a Company SSAS and the figures speak for themselves. We encourage you to take a look and discover the benefits for yourself.
It is critical that you consider commercial property ownership inside a SSAS because it could save you significantly on tax. If you’re not sure, get in touch.
One Crown Pensions is Here to Help
Putting commercial property into a SSAS Pension makes total financial sense. Get in touch with us to discuss your property portfolio and the options available to you.
