Art and taxes: the short, calm version

Nobody falls in love with a painting because of its invoice. Still, a little clarity about taxes makes buying art more relaxed, so here is the short version, in plain words and without tables.

When you buy

A gallery sale comes with an invoice, and the invoice shows the sales tax of the place where the gallery is. In Mexico that is VAT (IVA). Keep the invoice with the certificate: together they are the story of how the work became yours, and one day you may be glad to have them.

When the work travels

If the work crosses a border, the country that receives it may charge an import tax. How much depends on the destination, and it is the one number that tends to surprise people. Ask us before you pay and we will tell you what to expect for your country, so the total is known before the work leaves.

While it hangs on your wall

For most collectors, nothing happens. Enjoying a work at home is not a taxable event. A few countries count art in a wealth tax above certain amounts; if you live in one, your accountant already knows.

If you sell one day

If you sell for more than you paid, the difference can be taxable income, and your original invoice is the proof of what the work cost. That is the practical reason to keep your papers. It is also why our certificates travel with the work: the next owner inherits a clean history.

A sense of proportion

In the market index we keep, about half a million works that galleries have marked as sold, seven in ten of those with a public price sold for less than 5,000 dollars. For most purchases, tax is a line on the invoice and not a plan. When a purchase is large or crosses borders, a short call with an accountant is the cheapest part of the acquisition.

If you would like company

This is what we do every day from Mexico City: help people find, buy and live with original contemporary art. Book a free 30-minute call, or simply look at the works available now.

Image: “Concha de Loco” by Darío Phillipi.