What is a Buyer’s Premium?
Definition: A buyer’s premium is a surcharge added to the hammer price (the final bid) of an artwork at auction. Paid by the buyer, not the seller, this fee is how auction houses earn revenue beyond seller commissions. It typically ranges from 15% to 26%, depending on the house and the price tier.
For example, if a painting sells for $100,000 and the buyer’s premium is 25%, the total amount the buyer owes is $125,000. The premium structure may be tiered—lower percentages for higher value brackets—or may vary depending on whether the sale is online or live.
Critics argue that high buyer’s premiums discourage bidding, especially among newer collectors. Others see it as an accepted part of auction economics. It’s essential for buyers to factor in this fee when budgeting for an auction purchase.
