Can a SIPP invest in commercial property?

A SIPP can buy commercial property such as a shop or office, but only if your SIPP provider accepts it; a home counts as taxable property.

Tax law lets a SIPP own commercial property, and some providers support it, so the real questions are which property counts, what the fund can borrow and which provider will take the deal on. A building plan is best tested against your own pot, and an FCA-authorised adviser can cover that for free on the call that comes after the form on this page.

SIPP commercial property: which buildings count

HMRC's Pensions Tax Manual says "Taxable property consists of residential property and tangible moveable property". The tax charges bite on those two, so commercial buildings sit outside them. GOV.UK's stamp duty page gives "commercial property, for example shops or offices" as non-residential, and also lists forests and agricultural land that is part of a working farm.

Mixed use is where it gets harder. A shop with a wholly separate flat above it (its own entrance, no inter-connection) counts as two buildings in HMRC's manual, the flat still residential, while an inter-connected flat makes the whole building residential. Otherwise, HMRC says "you should look to establish the primary use".

For the full list of what a SIPP can hold and the tax charge when it buys the wrong thing, see SIPP eligible investments.

Which SIPP providers allow commercial property?

Not every one. The FCA's June 2026 consultation paper says "Bespoke SIPPs often allow consumers to invest in a range of non-standard assets such as commercial property".

• XPS says its XPS SIPP "supports commercial property investment", and its key features list "UK commercial land or property (with suitable insurance)" as allowed, but not residential property except in very limited cases.
• Quilter's Collective Retirement Account may not suit someone who wants "direct investment in shares or commercial property".
• Interactive investor, in its general guidance, says commercial property can be held "on some SIPPs", so ask ii whether its own SIPP is one of them.

If your pension is with Hargreaves Lansdown or another provider not listed here, ask it directly whether its SIPP will hold a building before you look at premises; Hargreaves Lansdown's charges are in Hargreaves Lansdown SIPP fees. Before you commit, choosing a SIPP shows how to compare providers.

The FCA also proposes that SIPP operators carry out additional due diligence on "Direct investments in UK or overseas commercial property". That is only a proposal, but expect a provider to ask questions first. Pension scams lists tactics to watch for.

Your own business as the SIPP's tenant

Many people want the SIPP to own the premises their company trades from. HMRC allows it: a member or sponsoring employer "could rent a property owned by the pension scheme but would have to pay the commercial rent due on the property". Pay less and HMRC treats the shortfall as an unauthorised payment, with a tax charge on that amount.

A company scheme has its own rules on lending to the employer and on how much can sit with one sponsor, which SSAS pensions and commercial property covers. For the SIPP versus SSAS choice, see SIPP or SSAS.

Borrowing to buy: the 50% limit

A SIPP can borrow, within a cap. The manual says the scheme "may borrow an amount up to the equivalent of 50% of the net value of the fund prior to the borrowing taking place", and the fund's value for this test does not include the investment being bought. The 50% is the total allowed, so any loan taken to cover VAT counts inside it. Borrowing above it is treated as a scheme chargeable payment. The manual adds that Pensions Act 2004 rules may limit borrowing further.

Lenders set their own terms, and a mortgage on a pension-owned building is a specialist product. Your provider will want to see the plan first, and some charge for it: XPS, for example, charges £445 plus VAT to set up each mortgage.

Stamp duty and VAT on a SIPP property purchase

In England and Northern Ireland, commercial purchases pay stamp duty land tax at GOV.UK's non-residential rates: "Up to £150,000 Zero", with higher rates on the portions above. GOV.UK's worked example is a freehold commercial property at £275,000, giving "Total SDLT = £3,250". That is an illustration, not a figure for your purchase.

VAT depends on the seller. HMRC says the sale of land is normally exempt from VAT, but a seller who has opted to tax makes standard-rated supplies, and the freehold sale of a new or partly completed commercial building "is standard-rated". Ask the seller early whether VAT is due, since it affects how much cash or borrowing the purchase needs.

Have a conveyancer confirm both before you exchange. Our eligible investments page covers the property tax charges separately.

Valuation, price and running costs

Price matters because the SIPP is dealing with people close to it. HMRC treats the gap as an unauthorised payment where a scheme buys an asset for more than it is worth, measured against an arm's length price. A valuation is therefore a protection, not a formality. XPS's key features say "The value of some investments, e.g. property, will need to be determined by a valuer", and the FCA's consultation says commercial property is costly and complex to value, so it may be valued less frequently.

Running costs sit on top of the platform charge. XPS's fee schedule, from 1 September 2026, lists a property fee of £1,100 on purchase (half paid in advance), £800 a year per property per lease and £710 on sale, plus its percentage-based annual SIPP fee, all with VAT added. These are one provider's own figures, and other providers charge differently, so check each fee schedule.

Selling, drawdown and the illiquidity problem

A building cannot be sold in a day. XPS's key features warn that "There may be a delay in receiving benefits if your investments can't be sold quickly e.g. because they're linked to property". If you plan to take income later through pension drawdown, an empty or unlettable unit can leave the SIPP short of cash while the fund is still worth plenty on paper.

The building belongs to the SIPP, not to you personally: the FCA notes that commercial property registered at HM Land Registry is often held directly by the trustee. The general rules on what happens to a pension when you die are in pension death benefits; for a building held in your fund, how those rules play out is a fair thing to put, without charge, to the adviser who rings when your form on this page is sent.

Property values and rents can fall as well as rise, so a SIPP holding one building concentrates risk, and you may get back less than was paid in.

Hotels, farmland and co-buyers: your property questions

Can a SIPP own a hotel?

HMRC's manual says a hotel the pension scheme owns in its entirety, or jointly owns as a whole, is not residential property. Owning only part of a hotel, such as a lease on one room that brings a right to stay, can be residential property, and so can timeshare accommodation.

Can I use my SIPP to buy farmland?

Bare land is neither residential nor moveable, so it is not taxable property, and XPS, for one, accepts land, though its "non-standard" fee applies if the land is not, or cannot be, rented out and has no planning permission. For stamp duty land tax, GOV.UK treats agricultural land that is part of a working farm as non-residential, but land sold as the garden or grounds of a dwelling pays residential rates, so a farm sold with a house needs checking with the provider first.

Can I buy a property with other people through a SIPP?

Some providers allow it: XPS's SIPP factsheet lists joint and family SIPPs, with shared fees for jointly owned assets. If your provider is a different one, ask whether it does the same before you agree terms with anyone buying alongside you.

Is it stamp duty in Scotland and Wales too?

No. GOV.UK says stamp duty land tax applies to purchases in England and Northern Ireland. A building in Scotland pays Land and Buildings Transaction Tax instead, and one in Wales pays Land Transaction Tax if the sale completed on or after 1 April 2018, so the rates and worked example above do not apply there.

Can a SIPP buy a house or buy-to-let?

Residential property is taxable property, which brings the charges described on our SIPP eligible investments page. For SIPP basics, read what a SIPP is.

Weighing up business premises or an investment building for your pension? Send in the enquiry form here and talk tax and borrowing over with an FCA-authorised adviser; it costs nothing.