Most people buying a significant work of art concentrate on a single figure: the price. It is understandable, but it is incomplete. Between the moment you agree to buy and the moment, perhaps decades later, when you or your heirs sell, a work of art attracts costs that other purchases do not. Some are paid once, some every year, and some only at the end.
None of these costs is a reason not to collect. They are simply part of owning art properly, and a buyer who budgets for them from the start avoids unwelcome surprises. What follows is a practical guide to what those costs are, based on the position in the UK at the time of writing.
COSTS ON THE WAY IN
At auction, the hammer price is only part of what you pay. The buyer's premium is added on top, charged on a sliding scale at the major international houses. From February 2026, Sotheby's charges 28 per cent of the hammer price up to £1.5 million at its London sales, with lower rates above that. Christie's and Phillips use similar structures. Regional auction houses set their own rates, which may be lower but are still significant.
VAT then applies, although how it is charged depends on the work and the seller. For most works sold at UK auctions, VAT at 20 per cent is charged on the buyer's premium rather than on the hammer price. Works imported into the UK for sale may also carry import VAT on the hammer price, at an effective rate of 5 per cent. When buying from a gallery or dealer, a work sold under the margin scheme will carry VAT within the price without showing it separately, while a new work sold by a VAT-registered business may have VAT added at the standard rate. It is always worth asking whether a quoted price includes VAT.
For works by living artists, and by artists who died within the last 70 years, the Artist's Resale Right may also apply to any sale after the first one, where the price is £1,000 or more and an art market professional is involved. The royalty is charged on a sliding scale, starting at 4 per cent on the first £50,000 and capped at £12,500 on any single sale. The law makes the seller and the art market professional responsible for paying it, but in practice auction houses commonly pass the charge on to the buyer, and catalogues mark the lots concerned.
Finally, there may be shipping, crating, framing and, for some works, installation. For a large or fragile piece, specialist art handlers are essential, and their charges can be considerable.
A WORKED EXAMPLE
Consider a painting by a living artist, bought at a London auction for a hammer price of £50,000. With a buyer's premium of 28 per cent, the premium comes to £14,000. VAT on the premium adds £2,800. If the Artist's Resale Right is passed on to the buyer, a further £2,000 follows. Before any shipping or framing, the painting has cost £68,800, which is 37.6 per cent above the hammer price.
The figures are illustrative, and every sale has its own conditions. The principle holds, however: the price you hear announced in the saleroom is not the price you pay.
INSURANCE
A valuable work should be insured, and ordinary household policies are often not well suited to the purpose. Many impose low limits for single items, and some exclude accidental damage or damage in transit. Specialist fine art insurance usually offers broader cover, including transit, accidental damage and, in some policies, protection against a fall in value if a work is damaged and restored.
Two points deserve attention. First, the basis of cover. An agreed value policy fixes the amount payable in advance, while other policies pay the market value at the time of loss, which may need to be proved after the event. Secondly, the valuation itself. Values change, and a work insured at its purchase price ten years ago may be badly under-insured today, or over-insured if the market has fallen. Insurers commonly recommend a professional revaluation every three to five years, and more often for artists whose prices are moving quickly. Valuations carry their own fees.
Premiums depend on the value of the collection, where it is kept, the security in place and how often works travel. Your insurer may require alarms, specific locks or other measures as a condition of cover.
CARE, CONSERVATION AND DISPLAY
Works of art are physical objects, and they deteriorate if neglected. Light fades pigments and paper, and humidity and temperature swings can cause canvas, wood and paper to move, crack or grow mould. Museums lending to one another commonly work to guidelines agreed through the international Bizot Group of museum directors, which allow a temperature of 16 to 25 degrees Celsius and relative humidity of 40 to 60 per cent for most materials. A home will rarely be controlled to that standard, but the principle is worth following: keep works away from direct sunlight, radiators, fireplaces and damp walls.
Framing is part of care as well as display. Glazing that filters ultraviolet light, acid-free mounts and secure fixings all protect a work over time. Occasional cleaning or repair by a qualified conservator, rather than a general restorer, may also be needed, and a condition report at the time of purchase gives you a record to compare against later.
STORAGE
Not every work can be on display at all times. Collectors who own more than they can hang, who move house or who live abroad for part of the year often use specialist fine art storage. These facilities offer controlled climate, high security and trained handlers, and they are usually priced by the space a work occupies, with additional charges for handling, viewing and transport. Over many years, storage can become one of the largest costs of ownership, and it is worth comparing facilities and terms with care.
TAX WHILE YOU OWN AND WHEN YOU SELL
In the UK, works of art are generally treated for capital gains tax as chattels, meaning tangible, movable possessions. The rules are summarised here for information only, and they change. Anyone with a significant collection should take professional tax advice before buying, giving or selling.
When a work is sold, any gain may be subject to capital gains tax. A work that sells for £6,000 or less is exempt from capital gains tax, and marginal relief limits the gain charged on sales just above that figure. Above that, gains are taxed in the ordinary way, currently at 18 per cent for basic rate taxpayers and 24 per cent for higher and additional rate taxpayers, after the annual exempt amount, which is £3,000 for the 2026 to 2027 tax year. The costs of buying and selling, such as premiums and commissions, can generally be deducted in calculating the gain.
Works of art also form part of an estate for inheritance tax, which is charged at 40 per cent on the value above the available nil-rate band, currently £325,000 per person. Gifts made during a lifetime may also have tax consequences. Special arrangements exist for works of national importance, including conditional exemption, under which tax can be deferred in return for undertakings on public access and care, and the Acceptance in Lieu and Cultural Gifts schemes, which allow important works to pass to public collections in settlement of, or in exchange for a reduction in, tax. These schemes are designed to keep significant works on view to the public, they are narrowly applied and they require specialist advice.
Rules differ outside the UK, and a collector who is resident or holds works in another country may face a different position altogether.
COSTS ON THE WAY OUT
Selling a work of art carries its own costs. At auction, the seller pays a commission, which is negotiated privately and may include charges for photography, insurance and catalogue illustration. Private sales through a dealer are usually priced on a commission or a fixed margin. Shipping, insurance in transit and, if needed, conservation before sale come on top. The Artist's Resale Right may also apply, as described above.
Taken together, the costs of buying at auction and later selling there can amount to a substantial share of the value of the work. That is one reason a work generally needs to rise considerably in value before a sale returns what you spent, and why art is best bought for the pleasure of owning it rather than in the expectation of a profit.
A SIMPLE CHECKLIST
■ Ask for the full cost of purchase, including premium, VAT, resale royalty, shipping and framing. ■ Arrange specialist insurance from the day you take ownership, including transit. ■ Obtain a condition report and keep every document that comes with the work. ■ Budget for revaluation every few years, and for storage if you will need it. ■ Take professional tax advice before any significant purchase, gift or sale.
HOW WE CAN HELP
Our research sets out the full cost of a proposed purchase, not only the price, and after a purchase we can help with storage, introductions to specialist insurance brokers, framing and documentation. Details are on Buying, under After the Purchase, and our own fees are set out on Fees and Engagement. We do not give tax advice, and we will always recommend that you take it from a qualified professional.