Craft Market Investment Needs Attention

If you are considering buying or selling artwork in 2013, here are three things you might want to consider:

1) Concern about changes in the tax rate in the new year: If politicians agree on how to avoid this country's fiscal fall from the cliff, then American taxpayers need to pay attention to changes in capital gains tax.

At present, the capital gains tax rate for art auctions is 28%, while the capital gains tax rate for assets such as stocks, bonds, and real estate is only 15%. If the latter’s tax rate rises to 20% and the tax rate of art remains unchanged, then relatively speaking, buying and selling art works will become more attractive. However, it is difficult to say what will happen now, which may be why in the past few weeks there was an article saying that due to the uncertainty of the future tax rate, people are both buying and rushing to buy art.

2) Think about China: Just as the recent increase in the number of Chinese art investment shows that China has no shortage of people who believe that art is a viable investment option.

However, after years of amazing growth, China, which has grown into the world’s largest art market, has had a very low demand for works of art in 2012. Like Western countries, the demand in the Chinese market is concentrated on a handful of popular artists. According to a report released by ArtTactic, the Chinese contemporary art market confidence index fell by 35% from May to November. It is difficult for us to grasp the full picture of the Chinese art market, but if this trend continues, then the price of global art in 2013 may be hampered.