Buyer's Premium & Auction Fees in South Africa, Explained

The winning bid is rarely the price you actually pay. Between buyer's premium, VAT, commission and deposits, the final figure can be meaningfully higher than the hammer. Here is how auction pricing works in South Africa so there are no surprises.

Hammer price

The hammer price is the amount of the winning bid — the point where the auctioneer's hammer falls. It is the starting point for the total, not the total itself.

Buyer's premium

The buyer's premium is a percentage the auctioneer adds to the hammer price, paid by the buyer. In South Africa it commonly ranges from about 6% to 15%, depending on the auctioneer and the type of asset (vehicles, property, livestock and industrial goods can all differ). VAT is usually charged on the premium.

Example: a R100,000 hammer with a 10% premium and 15% VAT on the premium works out to R100,000 + R10,000 + R1,500 = R111,500, before any other fees.

VAT

VAT may apply to the premium and, depending on the seller and the item, to the lot itself. A VAT-registered seller's goods are often quoted excluding VAT — check whether prices in the catalogue are inclusive or exclusive.

Seller's commission

The seller (not the buyer) pays the auctioneer a commission out of the proceeds. You will not see this on your buyer invoice, but it is why auctioneers can offer competitive buyer's premiums — the cost is shared across both sides.

Deposits and other fees

• Bidder deposit: a refundable amount to register for higher-value auctions (e.g. property or vehicles), returned if you do not win.
• Documentation / clearance fees: fixed charges for transfer, licensing or paperwork on some assets.
• Storage: charged if you collect late.

The bottom line

Before you bid, add it all up: hammer + premium + VAT + fees. Set your maximum bid so the all-in total still makes sense. The auction's terms and conditions must disclose these charges — read them first. New to bidding? Start with our step-by-step guide to buying at auction.