Buyer's premium

The buyer's premium was a feature in Roman auctions during the reign of Augustus, when buyers were required to pay a two percent tax on purchases.[4] The modern buyer's premium was introduced at 10% by Christie's and Sotheby's in London in September 1975.[5]

Percentages have varied widely, but have risen sharply with time. Early on, Christie's charged 14% in the Netherlands and Belgium, while Sotheby's charged 16% in Switzerland (10% to foreigners), 11% in Monaco and 16% in the Netherlands. There was no fee at Christie's sales in Australia and Sotheby Parke-Bernet auctions in South Africa. Christie's also charged no fees to buyers at its South Kensington house in London and at Edmiston in Glasgow. Christie's introduced a 10% fee to buyers in the United States when it opened at Park Avenue and 59th Street in May 1977. Sotheby's followed in January 1979.[5]

Beginning on 1 January 1993, Sotheby's charged buyers 15% on goods sold for $100,000 or less. Amounts above that were charged at 10%.[6] Christie's introduced the same price regime on 1 March 1993.[7]

On 24 January 2003, Christie's raised commissions charged to buyers in New York, London and Geneva to 12% on amounts above $100,000, effective 1 March 2003. The premium charged to buyers on the first $100,000 was held at 19.5 percent. Sotheby's had raised its premium for sales above $100,000 to 12% two weeks earlier, and increased its commission on the first $100,000 to 20% from 19.5%.[8] In London, that meant 20% on the first £70,000 and 12% on any amount above that.[9]

Christie's announced on 15 February 2013 that it would raise buyer's premium effective 11 March 2013. The new premiums were 25% for the first $75,000; 20% on the next $75,001 to $1.5 million and 12% on the rest.[10] Sotheby's followed suit on 28 February,[11] announcing raised premiums effective 15 March 2013.[12] Buyers in London, New York and France are charged 25% on the first $100,000 (£50,000; €30,000); 20% from $100,000 up to and including $2 million (£50,000 to £1,000,000; €30,000 to €1,200,000) and 12% on the remainder.[11][12]

Christie's later announced an amendment to their premium increase effective 30 September 2013. This amendment applied 25% premium up to $100,000; 20% to the amount $100,001 to $2,000,000 and 12% to the remainder.[13]

In 2017, Christie's changed its premiums again, increasing the rate on the highest prices to 12.5%, and denominating the price boundaries in local currencies. For London and New York (Dubai also using the dollar rates) respectively, the rates became 25% to £175,000/$250,000; 20% to £3,000,000/$4,000,000; and 12.5% over £3,000,000/$4,000,000. The Paris rates were notably more generous, with the same percentages but breaks at €150,000 and €2,000,000.[14]