Selling an art collection: advice for the seller

Put the houses in competition on written criteria

There is no general answer to the question "Drouot, an international house or a specialist house?". The right house is the one that, for these works and at this moment, brings together the buyers most likely to bid. The firm asks each house consulted for a written proposal, then compares them point by point on the following criteria.

• Speciality. The department that will sell the works, its recent public results for comparable works (same artist, period and price level) and the specialist who will write the catalogue entry.
• Sale calendar. The proposed sale (evening or day sale, themed sale, single-owner sale), its date, the length of the viewing and any pre-sale tour of the works.
• Buyer network. Where the house gathers bidders for this category of work, its ability to reach them and the share of remote bidding.
• Catalogue and marketing. Printed or online catalogue, cover, number of pages, specialist essay, emphasis on provenance, press campaign.
• Estimate. A high estimate attracts sellers but may deter bidders; it is assessed against comparable results and the house's written reasoning.
• Financial terms. Commission, ancillary costs, guarantees and reserve price, set out in the next section.

The firm neither recommends nor rules out any house as a matter of principle: it gives the seller a comparison table and a reasoned recommendation. The final choice is the seller's.

A negotiation grid for the consignment agreement

In France, the auction house acts as the owner's agent under a written mandate (Commercial Code, art. L. 321-5). Everything below is negotiated before signature and should be written into it. The amounts depend on the value of the works, their appeal to the house and the competition obtained: the firm works from the written proposals received, not from published rate cards.

Public auction or private sale

An auction produces a public price set by competition between buyers. A private sale, offered by auction houses under that name, produces a negotiated and confidential price. In France, a house that sells privately on the owner's behalf must first have informed the owner in writing, before the mandate, of the option to sell at public auction, and the written mandate must include an estimate (Commercial Code, art. L. 321-5, III).

The two routes can be combined: a collection may be dispersed over several sales, with some works reserved for a private sale or offered to a museum. A sale to a museum holding the "musée de France" designation or to a local-authority museum is exempt from the flat-rate tax (CGI, art. 150 VJ, 1°).

The place of sale changes the formalities, and sometimes the tax

For a seller domiciled for tax purposes in France, it is not the city of the sale that determines the tax, but where the work is physically located on the day of the sale. The sale of a work located in France or in another EU Member State falls within the flat-rate tax. A work sent outside the EU to be auctioned with a reserve price may leave under temporary export: if it sells, the export becomes permanent and the flat-rate tax is due, unless the seller elects for capital gains. By contrast, a work that has always been located outside the EU is outside the flat-rate tax and falls under the capital gains regime for movable property (BOI-RPPM-PVBMC-20-10, § 180 and 480).

The place is chosen first on market grounds: where the buyers for these works are. Tax comes second, and it is not solved by moving a work at the last minute: a work that leaves the EU to be sold remains taxable, either on permanent export, on its customs value, or, after a temporary export, when it is sold; a work moved to another EU Member State remains within the flat-rate tax there. Only a work that has always been located outside the EU falls outside it. The tax treaties concluded by France do not, for a French resident, remove French taxation of these gains, subject to case-by-case review. For a work held in Switzerland, see selling a work from Geneva as a French tax resident and, in French, the Geneva free port.

Taxation of the sale for a seller domiciled in France

• The rule: the flat-rate tax. Outside a professional activity, the sale for consideration, or the permanent export outside the EU, of a work of art, collector's item or antique is subject to a tax of 6% of the sale price or customs value (CGI, art. 150 VI and 150 VK), plus the 0.5% CRDS (CGI, art. 1600-0 I), i.e. 6.5%. It is due even if the work is sold at a loss. The commission paid to the auction house is not deducted from the price (BOI-RPPM-PVBMC-20-10, § 510).
• Who bears it and who files it. It is borne by the seller. Where an intermediary domiciled for tax purposes in France takes part in the sale, such as an auction house, the intermediary files and pays it under its own liability; failing an intermediary, a VAT-registered buyer established in France is liable; in other cases, including where the intermediary is established outside France, the seller files and pays it within one month of the sale, and the exporter does so at customs (CGI, art. 150 VK and 150 VM; BOI-RPPM-PVBMC-20-10, § 620).
• Election for the actual capital gain. The seller may elect for the capital gains regime for movable property if they can prove the purchase date and price, or ownership for more than twenty-two years (CGI, art. 150 VL). The gain, equal to the sale price less selling costs and less the purchase price increased by acquisition and restoration costs (CGI, art. 150 VA and 150 VB), is reduced by 5% for each year of ownership beyond the second, and therefore fully exempt after twenty-two years (CGI, art. 150 VC). It is taxed at 19% (CGI, art. 200 B) plus 17.2% social levies (Social Security Code, art. L. 136-7, I, 2°, and L. 136-8, IV), i.e. 36.2%. A capital loss cannot be offset.
• Supporting documents. Auction invoice or certificate from a public officer, invoice from a dealer or auction house, receipt from a private seller, or, for a work received by inheritance or gift, an extract from the estate return or deed that lists it separately (BOI-RPPM-PVBMC-20-20, § 60). Without such evidence and without proof of ownership for more than twenty-two years, the election is not available.
• Exemptions. Sales or exports where the price or customs value does not exceed EUR 5,000, assessed item by item except for sets; sales to a "musée de France" or local-authority museum, to the Bibliothèque nationale de France or another public library, or to a public archive service; sales or exports by a person not domiciled for tax purposes in France, an exporter then having to prove a prior import, introduction or acquisition in France (CGI, art. 150 VJ).
• Inherited work sold at auction within two years of death. The hammer price becomes the value used for inheritance tax (CGI, art. 764, I, 1°); the tax authorities accept that it also serves as the purchase price under the election, which reduces the gain to nil, even if the estate return has not yet been filed, provided the required statements appear on election form no. 2092 (BOI-RPPM-PVBMC-20-20, § 60 and 70). The calculation is therefore made together with the estate, not afterwards.

Illustration. A work bought for EUR 200,000 in March 2012 is sold for EUR 1,000,000 in November 2026 in Paris. Flat-rate tax: EUR 1,000,000 × 6.5% = EUR 65,000. Capital gains election, before costs: gross gain of EUR 800,000, fourteen years of ownership, 60% allowance (twelve years beyond the second), taxable gain of EUR 320,000, tax of EUR 320,000 × 36.2% = EUR 115,840. Here the flat-rate tax is cheaper; held for more than twenty-two years, the same work would be exempt under the election. Each work is calculated separately, on the documents.

Two other regimes are distinct from this one: the artist selling their own works, taxed on professional profits, and the collector whose buying and selling becomes a business, see tax and VAT for collectors who buy and resell. VAT on the sale concerns the auction house and the dealer, not the private seller: see margin VAT on the art market.

Two items sellers often forget

• The artist's resale right (droit de suite) is borne by the seller. Where an art market professional is involved, the resale of an original work of graphic or plastic art gives the artist, or the artist's heirs during the year of death and the following seventy years, a resale royalty borne by the seller, for which the professional is liable (Intellectual Property Code, art. L. 122-8 and L. 123-7). It is due where the price, net of tax, reaches EUR 750 (art. R. 122-5), at 4% up to EUR 50,000, then 3%, 1%, 0.5% and 0.25% by bands, capped at EUR 12,500 per work (art. R. 122-6).
• Export certificate. Taking out of France a cultural good within the categories and thresholds set by decree requires a certificate confirming that it is not a national treasure (Heritage Code, art. L. 111-2); leaving the EU also requires, where applicable, an export licence. The processing time must be built into the sale calendar.
• Refusal of the certificate. The work is then treated as a national treasure. For thirty months the State may make a purchase offer that takes account of international market prices; failing agreement, the price is set by expert valuation, and if the owner refuses an offer made at the valuation price, the refusal of the certificate is renewed (Heritage Code, art. L. 121-1). This scenario must be anticipated for major works; it sometimes opens other routes: sale to an institution, dation in lieu of tax.

On customs formalities and certificates, see import and export of works of art; on settling inheritance tax by transferring works, see dation in lieu of tax.