Hong Kong needs more tax breaks, better talent pool to boost art trading, expert says

Hong Kong needs to offer more tax benefits for vintage cars and other incentives to turn the city into a major base for storing and trading art, with an eye on building up its pool of industry talent and service providers, according to Sotheby’s former top executive in the region.

While the city is among the top three global art auction and trading hubs, it still lacked some ingredients to build upon, especially talent in art storage, authentication and repair, said Patti Wong, co-founder and partner of art advisory firm Patti Wong & Associates. These services were the top demands of family offices with art collections, she added.

The city should also consider offering a tax break for vintage cars, which many wealthy families collect, Wong said. Hong Kong does not tax art items, but taxes all cars, including classic cars, on a scale from 46 per cent to 132 per cent. That was too high to convince family offices to use the city to store or trade their car collections, she said.

“Hong Kong should raise its game by introducing more measures to attract global wealthy families to manage their art collections here,” said Wong, who has more than 30 years of experience in the business, including stints as the former chairman of Sotheby’s Asia and Sotheby’s Diamonds. She is also co-founder of New Perspectives Art Partners.

“Talent is important as family offices rely on external professionals to help preserve and create value for the assets,” she added. “Hong Kong will need more of these home-grown experts.”

There would be a big demand for arts trading in the coming years because of “the great wealth transfer”, she added, referring to the baby boomer generation leaving significant wealth to their heirs.