In auctions, the buyer's premium is a percentage additional charge on the hammer price (winning bid at auction) of the lot that must be paid by the winner. It is charged by the auctioneer to cover administrative expenses. The buyer's premium goes directly to the auction house and not to the seller.
A buyer's premium is basically a charge levied by the auction house, which is paid by the buyer in addition to the hammer price. The buyer's premium is kept by the auction house and is not passed on to the vendor. This means that you are paying an additional fee to the auction house for the privilege of having bought from them.
Major auction houses have made this charge for some time, particularly in the fine arts sector, with premiums in the region of 10%-25%. In the real estate sector in many European countries, the premium, if charged at all, is much less (2%-2.5%). However, more recently, in the UK foreclosure properties have been offered without fee to the seller, but with a substantial buyer's premium of 10%.
The buyer's premium is considered to be either a necessary contribution to the costs of the administrative process or an unreasonable extra charge by the auction community.  Auction houses may now market themselves as "not charging a premium" to gain favor with customers.  Regardless, such premiums are now commonplace and continue to grow.
The amount of the buyer's premium will normally be stated in the auction house terms and conditions or, in the case of UK properties, it would be listed in the RICS (Royal Institute of Chartered Surveyors) Common Auction Conditions or in the special conditions for the lot.