Does a finder’s fee count for stamp duty?
Finder’s fees and SDLT
HMRC’s example says a separate fee for finding a suitable home is not added to the house price where it pays for a search service and is not required for the purchase.
- Keep the finder’s agreement and invoice.
- Check whether the fee was a condition of the sale.
- Look at the real arrangement, not only the payment label.
Scroll down for the full analysis.
Read the original guidance here:
Does a finder’s fee count for stamp duty?
When a payment genuinely covers finding a suitable home under a separate arrangement, and is not required to secure the purchase, it will usually not be added to the price for stamp duty.
Its label is not decisive. What matters is the payment’s actual purpose.
What this rule is about
Stamp duty land tax, commonly known as SDLT, is calculated from the amount paid for the property.
You may also pay an estate agent or property finder. For SDLT, ask whether that additional payment was truly for a service or was, despite its description, part of the home’s price.
That is the test.
Your SDLT amount can change depending on the distinction. A fee for a separate search service may fall outside the property price.
Different treatment may apply where a fee must be paid to secure a particular sale.
What the official source says
HMRC’s manual includes an example of a buyer paying an estate agent £3,000 to research the market and locate a suitable three-bedroom house in London.
After this work is done, the buyer agrees to buy a house for £499,950.
In this example, HMRC says that the £3,000 does not count because it was paid under a separate agreement for finding a suitable property.
Paying that fee was not necessary to buy the house that was found.
- The agent agreed to search the market.
- The fee was for that search service.
- The agreement covered finding a suitable property or properties.
- The fee was paid under a separate agreement with the agent.
- Payment was not a condition of purchasing the house.
- HMRC therefore treats £499,950 as the amount paid for the property.
What this means in practice
Not every payment linked to a move will increase your SDLT bill. A genuine finder’s fee can be a separate cost for help with your property search.
Although HMRC’s manual provides guidance rather than law, the legal test considers money, or anything else of value, given directly or indirectly for the property.
Description does not control. Substance governs.
- Keep the finder’s agreement separate from the sale contract.
- State clearly what work the finder will carry out.
- Retain the agent’s invoice and proof of payment.
- Check whether the seller made the fee a condition of the sale.
- Check whether the fee relates only to one named property.
How to analyse it
Begin by asking what you received for the fee. Do not begin with the name given to the payment.
Even a document headed “finder’s fee” may, in substance, form part of the price.
- Identify the person who received the payment.
- Read the finder’s agreement alongside the sale papers.
- Decide whether the service was a general property search.
- Ask whether payment was required to buy the particular home.
- Check whether the payment was agreed with the seller.
- If one payment covers more than one thing, consider a fair split.
Example
For the search described in HMRC’s example, Maya pays an agent £3,000 to look for homes that meet her detailed needs.
Once the agent finds one, Maya agrees a price of £499,950. These are the relevant payments.
HMRC’s manual treats the £3,000 as payment for the search service. Accordingly, the amount for the property is £499,950, rather than £502,950.
Why this can be difficult in practice
This is where people can make mistakes. Even when a finder identifies the home eventually bought, that fact alone does not make the fee part of that home’s price.
Context matters.
Nor do separate agreements automatically place a payment outside SDLT.
Under the law, separate agreements and payments can still be treated as parts of one bargain where, in substance, they make up the consideration for the property.
Paperwork alone is insufficient. Documents, discussions and the reason for the payment may all be relevant.
- A fee paid to the seller requires close attention.
- A fee demanded before the seller accepts an offer may be difficult to separate from the sale.
- A fee for broader search work is easier to identify as a service.
- Describing a payment as an administration fee does not determine its treatment.
Key takeaways
- A genuine separate search fee may not count for SDLT.
- What the fee actually paid for matters more than its label.
- HMRC’s example depends on its particular facts.
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 — schedule 4 rules on taxable payment
- FA 2003 Schedule 4 para 1 — payments given for the property being bought
- FA 2003 Schedule 4 para 4 — fair split where a bargain has several parts
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 answer can change where the fee is required by the seller, is negotiated as part of the sale, or must be paid to secure a named property.
- The facts and documents must show what the fee was really for, not merely what it was called.
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 agreement with the estate agent or property finder
- The sale contract and any side agreements
- Invoices, payment records and correspondence explaining the service
- Evidence of whether the fee was required to buy the property
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 finder’s 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 - schedule 4 rules on taxable payment https://www.legislation.gov.uk/ukpga/2003/14/section/50/2025-11-17 - FA 2003 Schedule 4 para 1 - payments given for the property being bought https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/1/2025-11-17 - FA 2003 Schedule 4 para 4 - fair split where a bargain has several parts https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/4/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm03745 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 answer can change where the fee is required by the seller, is negotiated as part of the sale, or must be paid to secure a named property. - The facts and documents must show what the fee was really for, not merely what it was called. 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 1 September 2026
Useful article? You may find it helpful to read the original guidance here: Does a finder’s fee count for stamp duty?
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