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Costs and tax

Every fee you pay when you win at auction

Deposit, buyer's premium, reservation fees, search costs, legal fees and VAT: what you may pay on top of the hammer price when you win.

Lotwick team
Updated 10 October 2026 · 2 min read

In short
  • The hammer price is rarely the full cost.
  • Special conditions can pass on searches, the seller's costs, arrears or VAT.
  • Work backwards from your budget to your highest bid.
In this guide
  1. When you win
  2. Costs in the special conditions
  3. Your own costs
  4. Fees and stamp duty
  5. A simple habit

The hammer price is rarely the full cost. Before bidding, add up everything you will pay, using the auctioneer's terms and the lot's legal pack. Fees vary between auction houses and between lots.

When you win

Hammer price: your highest bidBuyer's fee or premiumCosts in the special conditionsStamp duty, LBTT or LTTSolicitor, survey and lender feesInsurance and any worksTotal budget, minus every cost below theline, gives the highest bid you can afford.
Your budget covers far more than the hammer price. Not to scale.
  • Deposit: usually 10% of the price at a traditional auction, often with a minimum amount, so on low-priced lots it can be more than 10%. It counts towards the price.
  • Buyer's administration fee or buyer's premium: a charge set by the auctioneer or seller, either a fixed sum or a percentage. Check whether VAT is added.
  • Reservation fee in conditional auctions: usually non-refundable and often paid on top of the price. One major provider quotes typically 4.5% including VAT, with a minimum of £6,600 including VAT.

Costs in the special conditions

  • Search fees: you may have to repay the seller for searches in the legal pack.
  • Seller's legal or surveying costs: some special conditions pass these to the buyer.
  • Arrears and adjustments: such as ground rent, service charges or rent from tenants.
  • VAT on the price: some lots, usually commercial, are sold plus VAT.

Your own costs

  • Your solicitor's fees, including any legal pack review before the auction, plus VAT.
  • Survey and valuation fees.
  • Lender and broker fees.
  • Stamp duty, or Land and Buildings Transaction Tax in Scotland or Land Transaction Tax in Wales.
  • Buildings insurance. Ask your solicitor when the property becomes your responsibility.

Fees and stamp duty

HMRC guidance gives an example where a buyer pays an auction fee the seller would otherwise owe, and that fee is treated as part of the price for Stamp Duty Land Tax. A conditional auction provider also warns that its fees may count towards stamp duty. Check with a solicitor how your fees will be treated.

A simple habit

For each lot you like, list every figure above in one place. Then work backwards: your total budget, minus all costs, gives the highest hammer price you can afford. Decide that number before the auction starts, and do not go past it on the day.

Sources

General information, not advice. Check with a solicitor or broker for your situation.

Live lots this applies to

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