Term: Buyer's Premium

This is an additional charge on the winning bid (or hammer price which is the announcement of the winning bid) at an auction paid for by the winner. This premium fee is charged by the auctioneer as remuneration and is paid by the buyer, along with any other fees typically charged by an auction house. These include sales tax. The buyer's premium is seen as necessary augmentation to the costs of running the auction and other administrative processes. The buyer's premium is usually stated under the auction house terms and conditions and may be subject to VAT (Value-Added Tax), depending on the country. Major auction houses typically charge a buyer’s premium anywhere between 10 – 30%, particularly in auctions dealing with fine art and similar.