Estate Agent Charges £3,000 Finder’s Fee for Identifying Suitable London Property

When a Finder’s Fee Is Excluded from SDLT Consideration

A finder’s fee paid to an estate agent or property search agent is not usually part of the SDLT calculation if it is a separate payment for services rather than part of the price paid to acquire the property. The key issue is what the payment is really for and whether it is required under the purchase deal.

• SDLT is charged on the consideration for the land transaction, not on every cost connected with buying a property.
• A separate fee paid under a distinct contract for finding or identifying a suitable property will normally not count as chargeable consideration.
• In the example, a £3,000 finder’s fee paid to an agent was excluded, so SDLT was charged only on the £499,950 purchase price.
• Important factors include who receives the fee, what the contract says, what service is being paid for, and whether the fee is a condition of the purchase.
• If a payment is really part of the deal to secure the property, or must be paid as part of the acquisition, it may be included in the SDLT consideration.

Scroll down for the full analysis.

When a finder’s fee is not part of the SDLT consideration

This page explains a narrow but practical SDLT point: whether a fee paid to an estate agent or property finder forms part of the “chargeable consideration” for the land transaction. The source example shows a case where it does not. That matters because SDLT is charged on the consideration for the land transaction, not on every cost connected with buying a property.

What this rule is about

When someone buys property, they often pay more than just the purchase price. There may be fees to agents, brokers, surveyors or other intermediaries. The key SDLT question is whether a particular payment is actually consideration for acquiring the land, or whether it is a separate payment for services.

The distinction matters because only chargeable consideration for the land transaction is brought into the SDLT calculation. A separate fee for professional or search services will not automatically be included just because it was incurred as part of the wider purchase process.

What the official source says

The official example deals with a buyer who asks an estate agent to find a suitable three-bedroom house in London. The buyer gives detailed requirements, and the agent agrees to research the market and identify a suitable property in return for a finder’s fee of £3,000. The agent finds a property, and the buyer’s offer of £499,950 is accepted.

The source says the £3,000 finder’s fee is not part of the chargeable consideration for SDLT. The reason is that:

• the fee is payable under a separate contract with the agent,
• it is paid for the service of identifying a suitable property, and
• payment of that fee is not a contractual condition of the purchase itself.

On those facts, the chargeable consideration for the property is only the purchase price of £499,950.

What this means in practice

A fee paid to a property finder or estate agent will not usually be added to the SDLT consideration if it is genuinely a separate payment for services and not part of what must be given to acquire the property.

In practical terms, the analysis is not about the label “finder’s fee”. The real question is what the buyer is paying for, and under what contractual arrangement.

If the buyer is paying an agent to search the market, shortlist options, arrange viewings, or identify a suitable property, that points towards a separate service fee. If that fee is owed whether or not a particular property is bought, or at least is not a condition of acquiring that property, the source example indicates it is outside the SDLT consideration.

By contrast, if a payment is in substance part of the price for securing the property, or must be made as part of the deal for the acquisition, the SDLT position may be different. The source material does not explore those other cases, but the example makes clear why separation of contracts and purpose of payment are important.

How to analyse it

To decide whether a finder’s fee is part of the SDLT consideration, ask the following questions:

• Who is the fee paid to? Is it paid to an agent for services, rather than to the seller or someone connected with the transfer of the property?
• What does the contract say? Is there a separate agreement for search or identification services?
• What is the fee actually for? Is it payment for researching and finding suitable properties, rather than for the property itself?
• Is the fee linked to a particular purchase? The source example treats it as important that the payment was not linked to any particular purchase.
• Is payment of the fee a condition of buying the property? If not, that supports the view that it is not chargeable consideration for the land transaction.

This is a substance-over-form exercise. A fee does not become part of the SDLT consideration merely because the buyer would not have found the property without the agent. What matters is whether the fee is consideration for the land transaction itself.

Example

A buyer hires a search agent to locate a suitable flat and agrees to pay £2,500 for that service. The agent identifies several options, one is chosen, and the buyer later purchases it for £400,000. If the £2,500 is payable under a separate services contract and is not a condition of the purchase contract, the logic of the official example suggests that SDLT is calculated on £400,000, not £402,500.

Why this can be difficult in practice

The difficulty is usually not the legal principle but the facts. A payment may be described as a finder’s fee, but the documents and commercial reality may suggest something more closely tied to the acquisition.

Points that may create uncertainty include:

• whether the fee is only triggered if a specific property is bought,
• whether the seller requires the payment to be made, directly or indirectly, as part of the deal,
• whether there is a genuine separate services contract, and
• whether the fee is really for property search services or is partly a disguised addition to the purchase price.

The source example gives a clear outcome on clear facts. Harder cases will depend on the contractual structure and what the payment is really for.

Key takeaways

• A separate finder’s fee paid for property search services is not necessarily part of the SDLT consideration.
• The important factors are the separate contract, the purpose of the fee, and whether payment is a condition of the purchase.
• On the source example’s facts, SDLT is charged on the purchase price alone, not on the finder’s fee.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Estate Agent Charges £3,000 Finder’s Fee for Identifying Suitable London Property

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