2026: When the state turns galleries into cash registers

This scene, which could become reality in 2026, marks a historic turning point for the French art market. After decades of favourable tax regimes—exemption from the wealth tax (ISF) in 1989, then from the IFI in 2018—the state now seems determined to make collectors and galleries pay. But at what cost? And who will really foot the bill?

---

01The tax history of art: a story of promises and betrayals

In 1989, France made a bold decision: it exempted artworks from the wealth tax (ISF). The goal? To revive a moribund market and attract foreign collectors. The gamble paid off. In the 1990s, sales soared. Picassos, Monets, and Soulages were snapped up at sky-high prices, and Paris regained its status as a global art capital. In 2018, the government replaced the ISF with the property wealth tax (IFI), once again excluding artworks from taxable assets. The measure was presented as "a strong signal for the French art market."

Yet by 2020, the first signs of tension appeared. The Covid-19 crisis hit galleries hard, and the inflation of artwork prices—with auction records broken for artists like Banksy and Basquiat—caught the attention of tax experts. In 2024, the Attal government announced a 6.8% cut in cultural funding for 2026, dropping from 4.028 to 3.753 billion euros. In this climate of budgetary restraint, artworks became an enticing target. "Why should collectors be exempt when property owners pay taxes?" asked a senior official at the Ministry of Economy.

The Professional Committee of Art Galleries (CPGA) reacted immediately. In a statement published in November 2024, it warned against "a dangerous measure that could destroy the French market." According to the CPGA, 80% of French galleries have an annual turnover of less than 500,000 euros, and 60% of their sales are to private individuals. "A tax hike will push collectors to sell their works before 2026, causing prices to collapse," explained Marion Papillon, president of the CPGA.

---

02French galleries: an ecosystem on the brink

In 2025, France has around 1,200 galleries, 600 of them in Paris. A dynamic but fragile network. According to the CPGA, 15% of Parisian galleries have closed since 2020, and the trend is accelerating. "Small galleries won’t survive a tax hike," confided a gallerist in Le Marais, who preferred to remain anonymous. "We already operate on thin margins. If VAT rises to 10%, we’ll have to raise prices, and collectors will buy elsewhere."

To understand the potential impact of the 2026 finance law, one must dive into the numbers. In 2024, the French art market accounted for about 30% of the European market. Parisian galleries generated an estimated annual turnover of 1.5 billion euros. But this apparent health masks a darker reality: dependence on private collectors. "Without them, we can’t survive," explained a gallerist on Rue de Turenne. "Public institutions buy very little, and companies are increasingly reluctant to sponsor."

The case of Galerie Nathalie Obadia is emblematic. Representing artists like Johanna Mirabel, Claire Tabouret, and Farhad Moshiri, the gallery has seen its turnover stagnate since 2020. "Collectors are becoming more cautious," said an employee. "They’re waiting to see what the government will do before buying." With the 2026 finance law, the gallery fears a 20 to 30% drop in sales. "We’re considering expanding online sales, but it’s not enough," she admitted.

---

03Artists: between precarity and opportunity

For artists, the 2026 finance law could have dramatic consequences. "I fear young artists won’t be able to make a living from their work," said Johanna Mirabel, whose paintings are regularly exhibited at Galerie Nathalie Obadia. "If galleries sell less, they’ll buy fewer works, and we’ll be forced to lower our prices."

The case of Kelly Sinnapah Mary, a visual artist who won the Villa Albertine prize in 2024, illustrates this precarity. Represented by James Cohan Gallery in New York, her works are in high demand in the US, where the tax regime is more favourable. "In France, galleries already take 50% commission on sales. If VAT rises to 10%, I won’t be able to sell my work," she explained.

For established artists, the situation is hardly better. Pierre Soulages, who died in 2022, saw the value of his works soar after their exemption from the IFI. In 2024, one of his paintings sold at auction for 30 million euros. "If the IFI is extended to artworks, collectors will sell their Soulages before 2026, causing prices to collapse," said a market expert.

---

04Collectors: the looming exodus

In 2025, France has around 5,000 private collectors, 200 of whom own collections worth over 10 million euros. For them, the 2026 finance law could be the final blow. "If France taxes my works, I’ll move them to Switzerland or Monaco," said a Parisian collector, who preferred to remain anonymous. "There, they’ll be tax-exempt, and I can continue lending them to museums."

The example of François Pinault is often cited. In 2020, the billionaire moved part of his collection—including works by Picasso and Koons—to Venice to avoid the French IFI. "France lost millions in taxes and major artworks," said a tax expert. "If the 2026 finance law passes, other collectors will do the same."

For galleries, this exodus of collectors would be catastrophic. "Without them, we can’t survive," said a gallerist on Rue Vieille-du-Temple. "Museums buy very little, and companies are less and less inclined to sponsor. If collectors leave, we’ll close."

---

05Museums: the big losers of the reform

In 2025, French museums rely heavily on artwork donations. Thanks to the 1989 law, collectors can donate works to the state in lieu of inheritance tax—a practice known as "dation en paiement." In 2024, the Centre Pompidou received a Picasso, and the Louvre a Rodin sculpture through this system.

But with the 2026 finance law, this practice could disappear. "If artworks become taxable, collectors won’t donate them to museums," said a curator at the Centre Pompidou. "They’ll sell them abroad or keep them in Swiss vaults."

The case of the Fondation Louis Vuitton is emblematic. Thanks to a favourable tax regime, Bernard Arnault has built an exceptional collection, which he regularly lends to museums. "If the 2026 finance law passes, patrons like Bernard Arnault might stop lending their works," said an expert.

---

06International competition: France falling behind

In 2025, France competes directly with London, New York, and Hong Kong for collectors and galleries. But with the 2026 finance law, it risks losing ground.

Country	Artwork taxation	Competitive advantage
France (2026)	Partial IFI + 10% VAT + 30% capital gains	Unattractive; risk of imbalance.
Switzerland	Total exemption (except for tax residents).	Tax haven for collectors.
United States	No federal tax on artworks (except capital gains on resale).	Dynamic market (New York dominates auctions).
United Kingdom	5% VAT + reduced inheritance tax for museum donations.	Attractive for galleries (London is the 2nd largest market).
Hong Kong	Total exemption.	Growing Asian hub (direct competition with Paris).

For French galleries, this competition is a major challenge. "If France taxes our works, we’ll sell them in Hong Kong or New York," said a gallerist on Rue de Turenne. "There, collectors don’t pay taxes, and galleries are more dynamic."

The case of Galerie Perrotin is revealing. In 2025, the gallery has 13 international spaces, including one in Hong Kong. "If the 2026 finance law passes, we’ll open a second space in Hong Kong," said a partner. "France can no longer be our only market."

---

07Possible scenarios: between crisis and adaptation

In 2025, the French art market stands at a crossroads. With the 2026 finance law, several scenarios are possible.

Scenario 1: The collector exodus (most likely) Major collectors (François Pinault, Bernard Arnault) move their works to Switzerland or Monaco. et Consequence: a 20 to 30% drop in gallery sales..

Scenario 2: Market adaptation Galleries refocus on young artists (cheaper, less taxed). et Growth of online sales (platforms like specialist online platforms, market data platforms)..

Scenario 3: Sector resistance Intensive lobbying by the CPGA and ADAGP for targeted exemptions. et Creation of guarantee funds to support struggling galleries..

For galleries, the stakes are clear: adapt or disappear. "We have no choice," said a gallerist on Rue Vieille-du-Temple. "If the 2026 finance law passes, we’ll have to innovate—or close."

---

082026: toward a crisis in the French art market?

In 2025, the French art market is at a crossroads. With the 2026 finance law, it risks losing its appeal in the face of international competition. But it also has a chance to reinvent itself.

For galleries, the challenge is twofold: resist the tax hike and innovate to attract new collectors. "We need to expand online sales and focus on young artists," said a gallerist in Le Marais. "It’s our only chance to survive."

For artists, the situation is more complex. "If galleries sell less, we’ll have to lower our prices," said Johanna Mirabel. "But we have no choice. We must keep creating."

For the state, the issue is political. "France must choose between culture and taxation," said Jean-Jacques Aillagon, former minister of culture. "Does it want to be a museum or a market?"

In 2026, the answer to this question will determine the future of the French art market—and with it, that of its galleries, artists, and collectors.