Christie’s quietly announced last week that it will be increasing its buyer’s premium by 5% on the first £75,000. This raises the threshold on the middle market which was previously charging this figure on the first £50,000. They have also tweaked the premium on other bands. According to ACN (Auction Central Weekly ) in collecting categories other than Wine, the new premium rate will be an amount equal to 25% of the hammer price of each lot up to and including £37,500/$75,000; plus 20% of the hammer price from £37,501/$75,001 up to and including £750,000/$1,500,000 and 12% above £750,001/$1,500,001 and above. This change effectively widens the thresholds where the percentage fees apply but does not change the percentage rates.
Examples of the impact on purchase prices (before taxes) for clients:
A client purchasing a lot with a hammer price of £50,000 currently pays £11,250 in premium. They would now pay £11,875 – an increase of £625 (5.6%)
A client purchasing a lot with a hammer price of £500,000 currently pays £101,250 in premium. They would now pay £101,875 – an increase of £625 (0.6%)
A client purchasing a lot with a hammer price of £3,000,000 currently pays £401,250 in premium. They would now pay £421,875 – an increase of £20,625 (5.14%)
The increase changes the percentages and value cutoffs for each premium amount to 25% for the first $75,000, 20% on any sale between $75,001 and $1.5 million, and 12% for any sale over that amount.
Other auction houses are likely to follow this lead. Sotheby’s was quoted as saying the company was: “studying the matter and haven’t taken any decisions. Georgina Adam of the FT, in London released the news last Monday on her Twitter feed. She also reported that Christie’s is increasing its fees in order to keep “current with rising costs while minimising impact on both buyers and sellers.” Christie’s turned over at least 5.3b dollars last year globally making Ms Adam’s reported statement from Christie’s a cynical, ‘laugh out loud matter’! The major auction rooms were once the reserve of professional art dealers. They have now increasingly becoming a retail marketplace for high end works of art, sold directly to the public, many seem to treat them like casinos.