Christie’s And Sotheby’s Defy Resale Tax With Massive Sales
Artist's resale royalty charge as yet fails to dent auction house prospects
In the face of the January enactment of the artist’s resale royalty charge, London’s auction houses have lined up a killer set of Impressionist, Modern and Contemporary art sales that could total an incredible £562 million. If achieved, this would be one of the highest totals on record. Next week, the highest prices at Sotheby’s and Christie’s are expected for works by Miró, with the artist’s early surrealist Peinture estimated at £10 million.
But, the artist’s resale royalty charge, which has applied since January 1 – not just to works of living European artists, but also to European artists who have died in the past 70 years – is set to dog the art market for many years to come, even if auctioneers have trumped this month through the sheer value of works on sale. The charge will now be applied as a percentage of the hammer prices on a sliding scale from 4% on prices between 1,000 and 50,000 euros to 0.25% on prices over 2 million euros, capped at a maximum of 12,500 euros.
Last February, the tax applied only to living European artists, but now, with the amendment of the charge, the charges will now apply to a whole sweep of key artists including Picasso, Giacometti, Henry Moore, and Joan Miró.
Dealers have launched a petition to the Government pleading for a raise of the minimum threshold, or to put pressure on the European Commission to change the law from the top.
But, so far, the art market has been little affected, especially given that investors are beginning to look to art as an alternative to shaky stocks. Art prices swelled last year, lifting sales at Christie's to $5.7 billion – that’s up an incredible 14% from the year before. A similar picture can be seen at Christie’s chief rival Sotheby's, which said it auctioned off $4.9 billion of art in 2011, up 14.5% from the year before.
Steven Murphy, Christie's chief executive, explained that collectors and investors see art as a safe bet for their cash at a time when the broader financial outlook looks uncertain: ‘Everyone is doubling down on art,’ he said. ‘That's why our market is so strong now.’
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