How Much Does It Cost to Set Up a SIPP for Property?

Setting up a new SIPP with a provider experienced in commercial property typically involves a one-off establishment fee. These vary considerably by provider:

• Platform SIPPs — some charge no establishment fee, but are often unsuitable for direct property
• Full-service SIPP providers (those that handle property) — typically £500–£1,500 to establish

If you are transferring existing pension funds into the new SIPP, there may also be transfer fees charged by the receiving SIPP provider (typically £100–£300 per transfer) and potentially exit penalties from the transferring scheme, though these are now relatively uncommon for mainstream personal pensions.

When the SIPP purchases commercial property, the provider charges a transaction fee for processing the purchase in their capacity as trustee. These fees vary significantly:

• SIPP provider property purchase fee — typically £1,000–£2,500
• RICS valuation — £500–£2,000+ depending on property size and complexity
• Specialist SIPP solicitor conveyancing fees — typically £2,500–£5,000 for a straightforward commercial property; more for complex transactions
• Stamp Duty Land Tax (SDLT) — standard commercial SDLT rates apply (0% up to £150,000, 2% on £150,001–£250,000, 5% above £250,000)
• Land Registry fees — based on the purchase price
• VAT — if the seller has opted to tax the property, VAT at 20% applies. The SIPP may recover this by also opting to tax

If you are borrowing to fund part of the purchase, additional costs apply. See our comprehensive guide on SIPP mortgage fees for a full breakdown, but in summary:

• Lender arrangement fee — typically 1–2% of the loan amount
• Broker fee — our fee structure is transparent and agreed upfront
• Lender valuation fee — separate to the SIPP provider valuation in some cases
• Legal fees for mortgage — the lender's solicitors will also charge for the mortgage deed

Once the property is in the SIPP, annual costs continue:

• SIPP annual administration fee — typically £500–£2,000 per year for a property-holding SIPP
• Property management — if you appoint a managing agent, typically 10–15% of rental income
• Buildings insurance — in the SIPP's name; costs vary by property
• Triennial valuation — SIPP providers typically require a professional valuation every three years
• Mortgage interest payments — the ongoing cost of any SIPP borrowing

In total, for a mid-sized commercial property acquisition of £500,000 using a £200,000 SIPP mortgage, you should budget approximately £15,000–£25,000 in total transaction costs (excluding SDLT). These costs should be weighed against the tax savings, which for a higher-rate taxpayer with a well-let property can run into tens of thousands of pounds per year. Use our Rental Yield Calculator to model the income picture.