The Sidney Morning Herald just posted on the some of the successes of the Australian auction art market. It also touches on some tax advantages and complexities of investing in art in Australia. The more important aspect of US appraisers is the positive signs in the auction market sales.
The Sidney Morning Herald reports
Source: The Sidney Morning HeraldThe signs are that people are again buying at auctions. The Sotheby's sale of Important Australian Art on May 14 in Melbourne cleared more than $7.4 million, including buyers' premiums.
The best seller was an early work by Brett Whiteley that had been kept in a private collection in Texas for more than 40 years. Woman in a Bath 1 (1963) sold for $976,000, including the buyer's premium (IBP) - well over estimates of $200,000 to $300,000.
It's been a while since that has happened. Auctioneers are cautious by nature, but the general consensus is there's a brighter vibe in their salerooms this year, and the bids are getting bigger. At the end of May, John Albrecht from Leonard Joel auctions was thrilled - and somewhat amazed - to sell a single-owner collection of Chinese snuff bottles for a total of $74,460 (IBP) against estimates of $18,000 to $26,000.
Snuff bottles have been hard to shift at any price before now. This buoyancy also applies to jewellery, furniture and design (Shapiro Auctioneers in Sydney sold a Fulvio Bianconi art glass vase for $16,800 IBP), and even to stamps and coins.
Phoenix Auctions sold the Stuart Hardy collection of Kangaroo stamps on May 9. They achieved a 100 per cent clearance rate, with total realisations of more than $2.58 million, almost double the catalogue estimates. This is a new record for any Australian philatelic auction. A typical result was the $233,000 paid for a mint £1 Sideways Watermark, setting a world-record price for a single Australian stamp.
The big question is, how much of what is being bought is done through self-managed superannuation funds? Not a lot, suggests Michael Fox, an accountant and valuer who specialises in fine-art investment for funds. ''I've had clients come in wanting to invest, but most people just say it's all too hard,'' he says.
A few years ago, the Gillard government was planning to prohibit all art acquisitions from being claimed as SMSF investments. Fox spearheaded a successful campaign against this proposal, with support from auction houses and galleries.
Instead, new ATO regulations were introduced which, Fox suggests, could have been invented by Monty Python's Ministry of Silly Walks.
According to Fox, this red tape reflects the ATO's position that the enjoyment of SMSF artworks is a form of pre-retirement benefit so is not allowed.
Add an artwork
The main changes relate to storage and insurance. Buyers planning to add an artwork to their fund's assets will need to have storage solutions in place before they buy. They have to keep written records of the documentation for the next 10 years. Collectors also need to arrange insurance. The asset has to be insured within seven days of purchase. In other words, the painting, sculpture, coin or stamp cannot be displayed, and therefore enjoyed, on the owner's property. Nor can it be kept in the owner's office or on private premises, including garages or sheds on their property.
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