As Art Basel Paris closed its doors on a successful 2025 edition, a potential change to the legislative framework emerged during debates on the 2026 Finance Bill in the National Assembly. On Friday, October 31, deputies adopted several amendments and sub-amendments that reclassify the real estate wealth tax (IFI) as an ʻunproductive wealth taxʼ that includes artworks.

While the taxation threshold remains unclear (between EUR 1.3 million and 2 million), the progressive rate structure is replaced by a flat rate of 1% applied to the fraction of net taxable assets exceeding this threshold. Regarding companies, amendment I-3052 would raise tax on ʻluxury goodsʼ owned by holding companies to 20%. This would include works of art, collectibles, and antiques such as paintings, sculptures, antique furniture, and rare books, unless they are made available to the public, for example through loans to museums.

Art Basel Paris spoke to three gallerists, Michele Casamonti (Tornabuoni), Nathalie Obadia (Galerie Nathalie Obadia), and Franck Prazan (Applicat-Prazan), as well as tax consultant Léopold Vassy, about the implications of this law, before it is decided whether or not it will be adopted in the coming weeks.

An overview of the evolution of Franceʼs taxes on art

Léopold Vassy: The desire to integrate artworks under a wealth tax is not new. As early as 1981, Secretary of Culture Jack Lang had, in the name of cultural exemption, ensured the exclusion of art from tax on large fortunes (IGF, 1982-1986). This logic was continued with ISF which succeeded it (1989-2017) – despite several attempts to challenge this exemption, all were unsuccessful. When in 2018 ISF transformed into IFI – limited to real estate assets – the debate seemed closed. Its specter, however, quickly resurfaced, notably during the 2022 presidential elections, the June 2024 legislative elections, and the amendment rejected in October 2024, which already aimed to create an unproductive wealth tax.

How is the subject treated in other European countries?

Léopold Vassy: If this project were to succeed, France would be virtually alone in this self-destruction of heritage and culture. Within the European Union, the only exception is Spain, which has a regional wealth tax and since 2023 a complementary and exceptional (though extended) tax on large fortunes. This taxation remains more nuanced than the one being considered here in France, because assets that are part of Spanish national or regional heritage are excluded. Other artworks and antiques can also be excluded under certain conditions, particularly if their value does not exceed a certain threshold.

In the rest of geographic Europe, Switzerland applies a cantonal wealth tax that exempts artworks displayed in the home but taxes those stored (including freeports). In Norway, artworks valued at less than NOK one million (approximately EUR 85,000) are excluded from the wealth tax. Finally, the largest market centers such as the United States, China, the United Kingdom, or even other major hubs like Japan and India, simply do not apply any wealth tax. France therefore runs the risk of swimming against the current of its main competitors.

How do you assess the potential impact of the tax on gallery activity?

Nathalie Obadia: There has already been an immediate consequence: acquisition decisions have been postponed or canceled since the proposed artwork tax. If it comes into force, the decline in revenue, which is difficult to estimate, will lead to a decrease in public revenues from VAT and corporate taxes. This will also potentially put jobs at risk and lead to a reduction in fair participation, especially those organized in France.

Franck Prazan: The consequences would be cataclysmic, even fatal.

What might be the reasons (economic, patrimonial, or strategic) that lead certain holding companies to acquire and keep artworks or collectibles?

Franck Prazan: These estate holding companies aim for long-term ownership and are intended to facilitate family transmission. They are governed by a law, the Dutreil Pact (which allows the transmission of a family business to benefit from an exemption of inheritance duties). Holding companies are motivated toward long-term ownership of art to preserve and transmit estate assets without disruption.

Michele Casamonti: Estate holding companies do not buy works for immediate speculative return. Often, it is a matter of image and cultural commitment, particularly through patronage actions.

Would introducing a tax on ʻluxury goodsʼ owned by holding companies have consequences for the art market, particularly regarding the acquisition, ownership, and transmission of works through these estate structures?

Michele Casamonti: Today, these structures often play a stabilizing role: they allow for the conservation, transmission, and growth of collections. If ownership is penalized fiscally, this will mean a decrease in acquisitions through holding companies and a transfer of collections abroad, to countries where taxation remains more favorable. We thus risk emptying French territories of a not insignificant part of its artistic heritage.

Léopold Vassy: The possible inclusion of artworks and collectibles within the tax on so-called ʻluxuryʼ assets held by estate holding companies raises several questions. On a practical front, the valuation of artworks constitutes one of the stumbling blocks of this chimerical measure. They will have to be made not according to their book value (purchase price) but according to their market value, which would require annual revaluation.

In this legislative framework, how do you interpret the qualification of artworks as ʻunproductive tangible assetsʼ?

Franck Prazan: An artwork is not a financial asset, it does not yield interest or dividends and does not offer the same guarantees over time as real estate – some may regret this. On the other hand, when an artwork changes hands, it is heavily taxed through various mechanisms. Slowing down or preventing these flows amounts to attacking the revenues they generate for the state. It is counterproductive. Not to mention that valuing an artwork is a difficult, even impossible exercise – because each piece of art has a unique character and its value is constantly evolving. Controlling the application of this measure will therefore be very difficult and will subject taxpayers to a veritable inquisition.

Léopold Vassy: We must also consider that holding artworks involves numerous expenses that contribute economic value and provide jobs in, for example, restoration, storage, insurance, and conservation.

If this measure were to come into force, what effect could it have on the presence and activity of foreign galleries in Paris?

Franck Prazan: These galleries came to the city because they believed – and let us hope they can continue to believe – that Paris was a new  art market stronghold. If these measures were adopted, it would certainly drive them away.

Michele Casamonti: It would be a perfect own goal! Paris risks losing a large part of its attractiveness. Foreign galleries, particularly Swiss, London-based, or American, could reconsider their presence in the Parisian market and relocate their sales to fiscally more neutral centers.

Beyond economic aspects, do you perceive possible effects on the dynamics of artistic creation and on artists in the French scene?

Michele Casamonti: This law would produce a chain reaction effect on art making. Galleries are the vital relay between artists and collectors; if the latter withdraw, the former will produce less, and the youngest artists will struggle to emerge. Under the guise of tax equity, this measure would risk directly weakening the French art scene, already up against strong international competition. By confusing cultural heritage with luxury products, it endangers not only the art market, but the entire ecosystem of creation and thought that it supports.

Nathalie Obadia: The risk would be seeing a number of art lovers choose to settle abroad and no longer purchase on the French market. Purchases of works by French artists would decrease, which would be detrimental to the vitality of the national scene. Collectors would no longer participate in enriching French museums, whose own acquisition budgets are hugely supplemented by patronage and donations. These measures therefore constitute a matter of public interest and do not only concern private actors.

Franck Prazan: The environment of cultural goods and culture in the broad sense forms a whole – the primary and secondary markets, institutions, artistic production, everything is intertwined. One cannot dissociate one of these aspects from the others. The French art market produces income for some 30,000 French artists and supports employment in a wide range of specialized auxiliary industries. In total, it represents 61,600 direct jobs and 111,275 indirect jobs in the broader market (artists, museums, and fairs), which is comparable to the advertising or publishing sectors. The stakes are therefore considerable.