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tax & costs
Buyer's premium
A fee paid by the winning bidder to the auction house, typically a percentage of the hammer price (often with a minimum). At many traditional auctioneers it is around 3% of hammer, often with a minimum of about £3,000.
In simple terms
An extra fee on top of the hammer price that goes to the auctioneer rather than the seller.
Example
Hammer £150,000 × 3% = £4,500 buyer's premium. Total premium: £4,500 + about £250 admin.
If you're buying
Always add the premium when budgeting. SDLT is calculated on the hammer + premium, not just the hammer.
If you're selling
Where the buyer's premium funds the auctioneer, sellers can pay no commission.
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