Auction Sales on the Rise Despite Royalty Charges
A healthy market even with trimming
Though protest to the recently enacted royalties charge on resales continues, auction houses are expecting record profits. Royalties charges that apply to art resales, much the same as in the music industry, began to take effect in January and are being expanded. The newest modification to the royalties measure includes European artists who died in the past 70 years, so a whole new group of major masters are now subject to charges. As it stands a sliding scale of charges applies to resales: 4% on works between 1,000 - 50,000 Euros down to 0.25% on sales over 2 million with a cap of 12,500 Euros. Dealers continue to attack the measure at all ends by asking the government to raise the minimum and going over their heads to the European Commission.
There is an encouraging lining to all of this discussion; the auction houses are doing well. Surprisingly, sales for both Christie's and Sotheby's were up about 14% from the year before. The upswing is encouraging, and with both houses planning major auctions in the next few days all eyes will be on the gavel. The poor economic climate is being tributed for investors turning to art as an alternative to more traditional investments, but still welcome news to dealers, collectors, and artists.
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