- Christie’s sold the Salvator Mundi in New York for about $450 million, a record for an artwork at auction.
- Art can be part of family wealth, but it requires authenticity, provenance and insurance to be well documented.
- It is an illiquid asset, with selling, storage and tax costs worth knowing about.
On 15 November 2017 the auction house Christie’s sold the Salvator Mundi, an oil painting attributed to Leonardo da Vinci, in New York for about $450 million, the highest price ever paid at auction for a work of art. The sale, followed with enormous media attention, made one painting a symbol of what a unique asset can be worth when scarcity, history and the interest of large buyers coincide. The buyer was not identified at the time of the sale.
The attribution to Leonardo, which became widely known from 2011 after the work was studied and restored, is a matter of debate among specialists. It is a reminder that in the art market value depends to a great extent on the authorship and provenance of each piece, and that those questions can be disputed and change over time, with direct consequences for the price.
Art as part of wealth
For many families, art is much more than an investment: it is cultural and emotional heritage. Even so, from a financial point of view, an artwork is a singular asset: it generates no income, its value depends on taste and fashion, and it is only truly known when it is sold. A record price at one auction does not mean the market as a whole is rising, or that other works are worth the same. Many important sales are made privately, without the price ever being made public, so auction figures are only one part of the market.
Costs also count: auction house commissions, insurance, transport, storage, restoration and, where applicable, taxes. That is why, as with any illiquid asset, it is worth distinguishing between the value of a work to the person who enjoys it and the price at which it could be sold at a given moment, which may be very different and take months to materialise.
Documentation and insurance
Provenance and authenticity are decisive. A work with complete documentation of its history, with certificates and technical studies, sells better, while doubts about its origin or a possible irregular export can affect its value and marketability. Before acquiring or inheriting an important piece, it is worth verifying who the owner is, what documentation exists and whether there are encumbrances or restrictions.
Insurance is another essential element: the policy must reflect the real value of the work, which changes with time and with the market, and include the terms of storage and transport. An up-to-date professional valuation helps to insure the asset for its value, to divide an inheritance on clear criteria and to manage wealth with reliable information.
Taxation and inheritance
On the tax side, works of art can form part of the wealth tax base and of an estate, and their sale can generate capital gains. There are specific rules on exemptions and reductions for certain assets, for example those linked to the historic heritage, which depend on the nature of the work and its legal status and should be analysed case by case.
Those who hold collections should plan their transfer: value the works, decide how to divide them among heirs without dividing what cannot be divided, and decide whether some can be deposited with or lent to institutions. It is not about buying or selling, but about managing in an orderly way wealth that may be valuable and hard to split. Consult your adviser before acting.
A record at auction is news; managing family art is, above all, a matter of documentation, insurance and planning.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
