Sotheby’s changes buyer’s premiums as auction houses experiment with new fees

Sotheby’s has recently modified its buyer’s premium fees in various global locations, commencing on the 13th of February. These non-negotiable charges, which are paid by the winning bidder on top of the hammer price at auction, represent a significant revenue stream for auction houses, which have been grappling with the art market’s downturn over the past three years.

Under the updated fee structure at Sotheby’s, buyer’s premiums for lots sold in New York are being adjusted. Previously, a 27% fee was applied to lots valued at $1 million or more, but with the new changes, a 28% premium will be charged for all works sold for hammer prices up to and including $2 million. The middle tier buyer’s premium will remain at 22% of the hammer price, yet it will now encompass lots sold for amounts between $2 million and $8 million. Previously, this rate was assigned to lots with hammer prices ranging from $1 million to $8 million. For the most valuable works, with hammer prices over $8 million, the fee will remain at 15%.

A representative for Sotheby’s has chosen not to provide any comments regarding these modifications to the fee structure. In a comparable move, Christie’s also raised its buyer’s premium rates in September 2025. The new structure includes a 27% fee on each lot valued up to $1.5 million, a 22% fee for work that hammers above these prices and up to $8 million, and a 15% charge for works sold for over $8 million. This replaced the previous fee system that saw charges of 26% on the first $1 million, 21% on lots up to $6 million, and 15% on sales exceeding these amounts.

Generally, with the adjustments made by Sotheby’s and Christie’s, more buyers will now be subject to higher fees on lower-priced items. This shift follows a prevailing demand for lower-priced works amidst an industry-wide downturn. Auction houses have started to offer more conservative estimates after years of dwindling sales. Both Sotheby’s and Christie’s finished last year with higher revenue projections, largely due to private sales and upscale auctions.

Phillips also introduced a new buyer’s fee structure in September 2025. This structure grants a “significantly lower” fee to bidders who place a binding written bid that matches the low estimate of a lot at least 48 hours before the auction. In contrast, Sotheby’s had lowered its buyer’s premiums to a flat 20% on most lots back in early 2024, with a 10% fee for works that hammered over $6 million. This adjustment led to higher fees being imposed on consignors of valuable works, ultimately proving less attractive to prospective sellers.

Sotheby’s latest change to its buyer’s premium fee structure is concurrent with the announcement that Sotheby’s Financial Services (SFS) would sell $900 million in asset-backed notes backed by art-secured loans. This latest financing includes loans secured against not just art but also collectible cars.

The securitisation process allows Sotheby’s to access capital immediately by selling the cash flow from existing loans to investors. The successful securitisation transaction closed on 3 February, with strong ratings from global credit rating agency Morningstar DBRS indicating low default risk. Through this innovative approach, Sotheby’s is able to gain access to funding upfront, rather than waiting for revenues to trickle in over time through its loan portfolio.