The auctioneer says forty thousand. You pay about fifty-six. Nobody hides this — the rates are published, the terms are on the website — and yet the gap between the hammer and the invoice remains the most reliable source of unpleasant surprise in the saleroom.
This is how the charges stack, why the rates are structured the way they are, and where the small amount of negotiating room actually exists.
What the Premium Is
The buyer’s premium is a percentage added to the hammer price and paid to the auction house rather than to the seller. It is the house’s principal revenue on the buy side, and it sits on top of the seller’s commission, which the consignor pays separately out of the hammer.
Both parties, in other words, pay the house on the same transaction. This is normal, disclosed, and worth holding in mind when reading anything an auction house says about a work’s prospects.
The Tapering Bands
Premium is not a flat rate. It is charged in tranches, with the percentage falling as the hammer price rises — so a single lot is charged at several different rates simultaneously.
The practical consequence: at the accessible end of the market you pay the highest rate. Someone bidding $8,000 on a day-sale lot carries a heavier proportional cost than someone bidding eight figures in the evening.
The Charges Nobody Mentions
Sales tax applies to the premium as well as the hammer. This surprises people every season. In New York that means roughly 8.9% levied on the combined figure, not on the hammer alone.
Artist’s resale royalty applies in the UK, the EU and a number of other jurisdictions on works by living artists and those recently deceased. It is charged as a percentage on a sliding scale and is usually the seller’s liability, but check which side the conditions of sale place it on.
Storage charges begin sooner than most buyers expect — often within days of the sale. If you cannot collect promptly, arrange shipping before you bid.
Shipping, crating and insurance are yours. A large canvas is a fragile, awkward, expensive object to move. Estimate it in advance, and if the work is crossing a border, add duty and import VAT to the calculation.
Is Any of It Negotiable?
The premium itself: essentially no, for a private buyer. It is published in the conditions of sale and applied uniformly. Trade buyers with substantial volume occasionally have arrangements; individuals do not.
What can move is everything around it. Payment terms, storage grace periods, and shipping arranged through the house rather than independently are all worth asking about, particularly on a significant purchase. The specialist handling the sale would rather accommodate you than lose the underbidder’s goodwill for next season.
Setting Your Limit Properly
Work backwards. Decide the total sum you are prepared to spend, subtract shipping, subtract tax, subtract the premium, and the remainder is your bidding ceiling.
Write it down before the sale and treat it as fixed. The entire architecture of a saleroom — the pace, the lighting, the visible competition, the auctioneer’s attention — exists to encourage one more bid. The psychology of that is worth understanding separately.
And remember that on a $40,000 hammer, one more increment is not $2,000. With premium and tax it is closer to $2,800.
Frequently Asked Questions
What is a buyer’s premium?
A percentage added to the hammer price and paid to the auction house rather than the seller. It is charged in addition to the seller’s commission, which the consignor pays separately.
How much is the buyer’s premium at Christie’s and Sotheby’s?
Broadly 20% to 27%, charged in tapering bands so the effective rate falls as the hammer price rises. Exact thresholds differ between houses and are revised periodically — check the conditions of sale for the specific auction.
Do I pay tax on the buyer’s premium?
Generally yes. Sales tax or VAT is typically applied to the hammer and the premium combined, not the hammer alone.
Can I negotiate the premium?
Not as a private buyer. Payment terms, storage and shipping arrangements are more flexible than the rate itself.
How much should I budget above my bid?
Roughly 35% to 40% above your bidding ceiling once premium, tax and shipping are included, at accessible price levels.
Part of our autumn 2026 auction season series. See also: the full season guide.
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