If you’re selling a property, it’s important to understand VAT on estate agent fees and how it affects the total cost of selling your home. Many sellers are unsure how much VAT is on estate agent fees or whether VAT is included in quoted prices.
This guide explains the VAT rate on estate agent fees in the UK, how it’s calculated, and what sellers should look out for before agreeing to an agent contract.
What Is the VAT Rate on Estate Agent Fees?
The VAT rate on estate agent fees in the UK is 20%.
This applies to:
- Estate agent commission
- Fixed-fee estate agents
- Online and high-street estate agents
So if you’re wondering what is the VAT rate on estate agents’ fees, the answer is 20%.
How Much Is VAT on Estate Agent Fees?
VAT is charged at 20% of the agent’s fee, not the property price.
Example:
- Estate agent fee: 1.5%
- VAT rate: 20%
- VAT amount: 0.3%
- Total payable: 1.8%
So when asking how much is VAT on estate agent fees, the VAT is calculated on the fee itself, not the sale value.
Is VAT Included in Estate Agent Fees?
In many cases, VAT is not included in advertised estate agent fees unless clearly stated.
Estate agents may quote:
- “1.5% + VAT” (VAT added on top)
- “1.8% including VAT” (VAT already included)
Always confirm whether the quoted price includes VAT to avoid surprises at completion.
Do All Estate Agents Charge VAT?
Yes. VAT is charged on estate agent fees because estate agency services are VAT-taxable in the UK.
This applies to:
- High-street estate agents
- Online estate agents
- Fixed-fee agents
There is no legal way for sellers to avoid VAT on estate agent fees.
VAT on Estate Agents’ Fees vs Total Selling Costs
VAT on estate agent fees is only one part of the overall cost of selling a house.
👉 For a full breakdown of agent charges, see: Estate Agent Fees
👉 To understand additional selling expenses beyond VAT and commission, see: Hidden Costs When Selling a House UK
Can You Reduce VAT on Estate Agent Fees?
While you cannot remove VAT, you can reduce how much VAT you pay by:
- Negotiating a lower estate agent fee
- Comparing multiple agents
- Avoiding unnecessary premium add-ons
A lower base fee means less VAT overall.
How VAT Is Paid on Estate Agent Fees
In most cases:
- VAT is added to the estate agent invoice
- The total fee (including VAT) is paid on completion
- Your solicitor usually deducts it from the sale proceeds
Always check the agency agreement for VAT wording.
VAT on Estate Agent Fees: Key Takeaways
- The VAT rate on estate agent fees UK sellers pay is 20%
- VAT is charged on the agent’s fee, not the property price
- Fees may be quoted with or without VAT
- VAT is unavoidable but total costs can be reduced by negotiating fees
