A new systematic method for optimal viscous damper placement in shear-flexural building models is developed taking into account the response amplification due to the surface ground. Non-linear amplification of the surface ground is described by an equivalent linear model and interaction with the surrounding soil is incorporated with horizontal and rotational springs and dashpots. Hysteretic damping of the surface ground and the property of the semi-infinite ground are included in the model. An original steepest direction search algorithm is applied to the interaction model. In shear-flexural building models, story-installation type dampers are effective for shear deformations only and design implications derived for shear building models with fixed bases are not necessarily meaningful for the present model. It is shown that effective damper placement is influenced greatly by the surface ground properties.