Christie's Hikes Buyers Fee
London - Christie’s quietly announced last week that it will be increasing its buyer’s premium for U.K bidders by 5% on the first £75,000.
Art collectors of Art Kabinett social media network are dismayed at this very tricky price hike.
This raises the threshold on the middle market which was previously charging this figure on the first £50,000. They have also tweaked the fee on other bands.
According to ACN (Auction Central Weekly ) in collecting categories other than Wine, the new premium rate will be an amount equal to 25% of the hammer price of each lot up to and including £37,500; 20% of the hammer price from £37,501 up to and including £750,000; and 12% above £750,00.
The old rates were 25% on the first £25,000; 20% on £25,000 - £500,000; and 12% above £500,000.
This change effectively widens the thresholds where the percentage fees apply but does not change the percentage rates.
Examples of the impact on purchase prices (before taxes) for clients:
A client purchasing a lot with a hammer price of £50,000 currently pays £11,250 in premium. They would now pay £11,875 – an increase of £625 (5.6%).
A client purchasing a lot with a hammer price of £500,000 currently pays £101,250 in premium. They would now pay £101,875 – an increase of £625 (0.6%).
A client purchasing a lot with a hammer price of £3,000,000 currently pays £401,250 in premium. They would now pay £421,875 – an increase of £20,625 (5.14%).
The increase changes the old percentages and value cutoffs for each premium amount to 25% for the first $75,000, 20% on any sale between $75,001 and $1.5 million, and 12% for any sale over that amount.
Other auction houses are likely to follow this lead. Sotheby’s was quoted as saying the company was: “studying the matter and haven’t taken any decisions.
In the U.S, and the current fee schedule remains 25% from zero to $50,000; 20% between $50,000 and $1 million; 12% over $1 million.
In the Eurozone, the same percentage stepwise increments occur from zero to €15,000; €15,000 - €80,000; and above €80,000.
Georgina Adam of the FT, in London. reported that Christie’s is increasing its fees in order to keep “current with rising costs while minimizing impact on both buyers and sellers.”
Christie's turned over at least $5.3 billion last year globally making Ms Adam's reported statement from Christie's a preposterous conclusion.
The major auction rooms were once the reserve of professional art dealers. They have now increasingly becoming a retail marketplace for high end works of art, sold directly to the public, who are willing to bear increasingly higher fees to obtain important works of art.