Tax Arbitrage and Market Flows: Paris’s Emerging Advantage in Europe’s Art Investment Landscape

Paris is no longer just a capital of museums and fashion weeks; it could be positioning itself as a contemporary art trading floor. Over recent marquee October auction cycles with Frieze London and Art Basel Paris, Paris might be taking a visibly larger share of the season’s hammer totals, potentially edging toward London’s long-held dominance in contemporary art. Looking back across roughly twenty years, London used to dominate without question, but new data from the London-based firm Pi-eX suggests the gap might now be narrowing. Buyers, sellers and advisers increasingly treat Paris as a serious venue for contemporary art, and they might read the city as a rational place to sell when thinking about liquidity, asset rotation and investment timing.

Figure 1: October London & Paris Auction Results at Top 3 Auction Houses: 2007-2025, © Pi-eX London

Reasons Behind the Surge in Paris

Tax is the first accelerator. The UK is signalling tighter rules for non-domiciled wealth under the newly announced regime from Rachel Reeves effective 2025, which could prompt high-net-worth sellers to explore residence alternatives and shift collections away from London — and some wealthy investors consider relocating to Italy for more favourable tax treatment. Meanwhile France quietly offers a competitive regime: works of art imported permanently into France may attract a reduced VAT rate of 5.5 %, rather than the full standard 20 %. Add in post-Brexit frictions — currency risk, customs paperwork, and political fatigue in the UK — and Paris begins to look easier.

Auction houses might therefore stage more marquee catalogues in Paris, including high-value contemporary art consignments that previously would have defaulted to London.

London’s Economic Impact

The shift shows up in London’s macro-picture. UK government long-dated borrowing costs have surged: the yield on 30-year gilts reached around 5.72 % in September 2025 — the highest level since the late 1990s. This could raise the cost of leverage, weaken confidence in high-end transactions and possibly discourage art-market investment activity anchored in London. Meanwhile, fewer IPOs are raising significant sums on the London Stock Exchange — with the lowest proceeds in roughly thirty years — which means fewer newly-liquid founders and financiers might choose London as their selling ground. In that climate, sellers might choose to consign elsewhere. Based on available public disclosures, the combined October 2025 contemporary art auctions at Sotheby’s, Christie’s, and Phillips in London totalled approximately £155 million, while equivalent sales in Paris reached roughly £145 million, signalling that Paris may now be approaching parity in its seasonal auction volumes.

For collectors, The Centre Pompidou gives a glimpse of one of the best contemporary art in French capital. © Cenk Usel.

Quality, Liquidity and Diversification

France is not offering a fairy-tale. Its public debt has risen to about €3.4 trillion (around 114 % of GDP), and the country continues to face leadership volatility and protest movements. Yet the UK’s political economy might be looking shakier, and that relative contrast could provide Paris with a lifeline in the art-market narrative.

Paris already outperforms London in certain Old Masters categories; the ongoing question is whether it might entrench the same advantage in contemporary art.

If Paris continues to attract consignors, boost liquidity andoffer a diverse range of quality contemporary art; what would this mean for collectors and art market investments? The chance of finding high quality, aesthetically strong with valuable provenance artwork and diversifying art investments in Paris grows more vividly than ever.

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*The views expressed in this article are solely personal opinions and should not be considered as investment advice.

*Disclaimer: Unless otherwise stated, all images featured in this article are AI-generated for illustrative purposes. They are not based on, affiliated with, or reproductions of any existing copyrighted images or artworks.

Cenk Usel

Art Market Professional