Does a sale-by-tender fee count for stamp duty?
Sale-by-tender fees and stamp duty
HMRC says a tender fee can be added to the price used for SDLT if paying it was a condition of buying the property.
- Look beyond the accepted bid.
- Keep the tender paperwork.
- Check whether the fee included VAT.
Scroll down for the full analysis.
Read the original guidance here:
Does a sale-by-tender fee count for stamp duty?
If you must pay an estate agent’s sale-by-tender fee to buy a home, it can add to the amount used for stamp duty land tax. HMRC’s example adds a £5,000 fee to a £350,000 bid. That makes £355,000.
What this rule is about
After winning, a buyer may have to pay a fee to the estate agent as a condition of the sale. A sale by tender asks interested buyers to submit bids, often in sealed form.
In short, the headline bid may not be the whole amount paid to get the property.
What the official source says
HMRC’s manual gives an example of a bungalow sold this way. It says the fee forms part of the amount paid for the property where the buyer agreed to pay it as a condition of buying it.
- The winning bid was £350,000.
- The buyer had to pay a £5,000 tender fee.
- The fee included VAT.
- HMRC treated the total as £355,000.
What this means in practice
Do not look only at the figure in your accepted bid. Instead, check every payment that you had to agree to make before the seller would complete the sale.
- Include the tender fee in the figures given to your conveyancer.
- Keep the tender terms and the estate agent’s invoice.
- Check whether the quoted fee includes VAT.
How to analyse it
Ask what the payment really bought. Where you had to pay a fee to secure the home, it may be part of the total for SDLT, even if you paid the estate agent rather than the seller.
- Was your bid accepted?
- Did the sale terms make the fee compulsory?
- Did you agree to that condition?
- What amount did you have to pay, including VAT?
Example
Anna’s bid of £350,000 wins. To buy, the estate agent says she must pay its £5,000 sale-by-tender fee, including VAT. Following HMRC’s example, the figure used for stamp duty is £355,000, not £350,000.
Why this can be difficult in practice
People often miss this point: a fee can look separate because it appears on an agent’s invoice. More than the label, the papers and the facts matter.
- A compulsory fee is different from a payment you could refuse.
- The manual does not explain every type of estate-agent charge.
- Optional or separate services may need a closer look.
Key takeaways
- A compulsory tender fee may increase the stamp duty figure.
- HMRC’s example adds a £5,000 fee to a £350,000 bid.
- Check the tender terms, invoice and VAT treatment.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 section 50 — introduces the rules on amounts paid for land
- FA 2003 Schedule 4 para 1 — money given directly or indirectly for the land
- FA 2003 Schedule 4 para 2 — when VAT forms part of the amount paid
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- The supplied example does not explain the position where a fee is optional, refundable, paid for a separate service, or agreed after the sale.
- The bundled statutory text is current only to 17 November 2025. Current primary legislation should be checked for a transaction after that date.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- The sale-by-tender terms and conditions
- The accepted bid and sale contract
- The estate agent’s invoice and proof of payment
- Evidence showing whether the fee was a condition of the purchase
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION Does a sale-by-tender fee count for stamp duty? [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 section 50 - introduces the rules on amounts paid for land https://www.legislation.gov.uk/ukpga/2003/14/section/50/2025-11-17 - FA 2003 Schedule 4 para 1 - money given directly or indirectly for the land https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/1/2025-11-17 - FA 2003 Schedule 4 para 2 - when VAT forms part of the amount paid https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/2/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm03735 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - The supplied example does not explain the position where a fee is optional, refundable, paid for a separate service, or agreed after the sale. - The bundled statutory text is current only to 17 November 2025. Current primary legislation should be checked for a transaction after that date. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 31 August 2026
Useful article? You may find it helpful to read the original guidance here: Does a sale-by-tender fee count for stamp duty?
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