Happy New Year!
Forbes has a short post on three things art buyers and sellers should be aware of for 2013. They included be cautious of high end contemporary art, changes in tax law, especially capital gains rates, and watch China which had a slow 2012. Will it pick up in 2013, or will the downward trend continue and in effect lower prices overall.
Forbes reports
Source: Forbes
2) Watch out for tax changes in the new year
U.S. taxpayers need to keep an eye on what happens to capital gains tax rates if politicians ever do come to an agreement about how to stop the country going over the fiscal cliff. Capital gains on art sales are currently taxed at 28%, while capital gains on assets such as stocks, bonds and real estate are taxed at 15%. If capital gains tax on those assets goes up to 20% and capital gains on art remains the same, selling art will look slightly more attractive on a relative basis. Still, it’s tough to tell what will happen right now, which is probably why in the last few weeks, articles have appeared suggesting that people are both snapping up art and selling it off because of uncertainty about what future tax rates will be.
3) Consider China
There’s no shortage of people in China that believe that art is viable investment, as the recent growth in the number of Chinese art investment funds attests. Nevertheless, after years of impressive growth, demand for fine art within China, now the world’s biggest art market, was pretty lackluster in 2012. As in the west, demand was concentrated around a handful of the most sought-after names and in the Chinese contemporary art market, confidence dropped 35% in the period from May to November, according to a report by ArtTactic. Getting a full picture of China’s art market is a challenge, but if this trend continues, it could be a drag on global art prices in 2013.
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