The art collections of the world’s super-rich are worth almost as much as the wealth of all Dutch people combined. This emerges from a report by business services provider Deloitte. Some of these works of art are permanently lost in storage. The temperature and humidity are perfect there, but it’s also a way to avoid taxes.
Last year, the value of art and collector’s collections of very wealthy individuals was an estimated €2 trillion (2 trillion). For comparison: the savings, homes, stocks and all other assets of all Dutch households were worth “only” 0.45 trillion more this year.
In 2016, the value of the super-rich’s collection was 1.5 trillion euros.
Art is a popular investment item for the super-rich. Financial advisors are also increasingly encouraging wealthy people to invest in works of art, the report shows. In 2014, only half of advisors believed investing in art should be part of wealth management. 90 percent of advisors now consider art and collectibles such as rare wines, vintage cars or jewelry to be important content.
“Interest in art as an investment tool has been around for a long time, but it is definitely growing,” says Bert Kreuk, himself a millionaire and art collector. “An alternative to gold and stocks. From where? Art is unique. There are very few works of the quality of Monet or Picasso. This means that these paintings do not lose value rapidly.”
Deloitte researchers also note that purchasing part of a work of art rather than the whole is becoming increasingly popular. This type of investment is especially popular with young and wealthy people.
The art trade was worth $68 billion in 2022. The luxury collectibles trade was worth $363 billion; This nearly doubled the value of the market in two years.
hundreds of millions
Earlier this month, another Picasso sold for more than 130 million euros. The sale was part of an auction of the art collection of multimillionaire Emily Fisher Landau, who died this year. The identity of the buyer is unknown. “Buying these kinds of paintings has become an international billionaire game,” says Kreuk, who also owns a Picasso. “I was lucky enough to start collecting art 30 years ago. I could no longer afford my own collection.
Kreuk saw, among other things, that Qataris and Saudis were also becoming increasingly interested in the best European art. “A lot has flowed into Qatar in the last 20 years to fill the museums there,” says Kreuk. “The Saudis are doing the same thing now.”
For example, in 2017, a Saudi prince paid $450 million for Salvator Mundi. The painting attributed to Leonardo da Vinci has become the most expensive work of art in the world.
not on the wall
Most of these masterpieces do not hang in the living room of a millionaire or billionaire. In some cases, art owners loan their art to museums. However, some more are lost in places called free ports. These are special warehouses for valuables.
“Such paintings are too expensive to hang on the wall at home. “Insurers don’t want this,” says Kreuk, who also keeps part of his collection in a free port. “Young artists hang on the wall, while I keep the more expensive works in stock.”
Kreuk understands that some art owners also use storage facilities to avoid any costs. “For example, you can avoid import duties.” It could also be a way to avoid VAT or wealth tax. Or as Icelandic economist Oddny Helgadóttir writes: Luxury goods warehouses have become part of the global tax avoidance ecosystem.
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
