How to Sell Rare Wine: Understanding the Auction Process

Anyone working out how to sell rare wine should begin with the factors that influence its value, such as condition, rarity, quality, and provenance. Auction houses like Christie's act as agents for sellers. They provide estimates based on these criteria and set a confidential reserve price below which a lot will not sell. Auction houses define buyer's premiums and sales taxes clearly. You must also consider potential Capital Gains Tax implications, as certain wine assets may be exempt depending on their lifespan. Navigating the practicalities of collection, shipping, and authenticity warranties is also crucial for a successful sale.

What factors influence the value of your wine?

Several key factors influence the value of your wine. Auction specialists weigh them when preparing estimates. Christie's bases its estimates upon prices recently paid at auction for comparable property. They also take into account condition, rarity, quality, and provenance, which is the ownership history of a lot. For older wines, natural variations of ullages, conditions of cases, labels, and corks must be considered. Christie's notes that corks over 20 years old begin to lose their elasticity. The house adds that levels can change between cataloguing and sale. Understanding these elements is essential for assessing your wine's market position. For instance, a bottle of Domaine de la Romanée-Conti will have its value significantly shaped by these details. You can learn more about assessing fill levels in our guide to wine ullage levels explained.

How do auction houses determine estimates and reserves?

Auction houses determine estimates and reserves through a specialist-led process. Christie's states that catalogue entries include descriptions for every lot. Each entry also carries a price range that is their specialists’ opinion of the price expected at auction. These estimates are based on prices recently paid at auction for comparable property, considering condition, rarity, quality, and provenance. Estimates are prepared well in advance of the sale and are subject to revision. Buyers should not rely upon estimates as a representation or prediction of actual selling prices, according to Christie's.

Unless otherwise indicated, all lots are offered subject to a reserve. Christie's defines the reserve as the confidential minimum price the consignor will accept and below which a lot will not be sold. The reserve will not exceed the low pre-sale estimate. Christie's also states that the auctioneer may open the bidding on any lot below the reserve by placing a bid on behalf of the seller. The auctioneer may then continue to bid on behalf of the seller up to the amount of the reserve.

What fees and taxes apply when selling wine?

When selling wine, you will encounter various fees and potential tax obligations. The charges set out below are the buyer's premium, sales tax, the state shipping fees Christie's collects, and Capital Gains Tax.

Buyer's Premium: Christie's charges a premium to the buyer on the final bid price of each lot of wine sold. That premium runs at a rate of 25% of the final bid price of each lot.

Sales Tax: For all lots, taxes are payable on the premium at the applicable rate, according to Christie's. Christie's collects New York sales tax at a rate of 8.875% for any lot collected from Christie's in New York. For shipments to states other than New York, Florida, New Hampshire, and Wyoming, and for international shipments, Christie's collects New York sales tax at a rate of 8.875% prior to collection. That applies unless there is a tax exemption on file.

Specific fees apply for shipments to certain states:

• New Hampshire: Christie's is obligated to collect a fee of eight percent (8%) of the hammer price plus buyer’s premium (exclusive of sales tax) prior to any shipments of wine. The fee covers the cost of filing a report with that state. Christie's may not ship more than twelve (12) 9-liter cases or equivalent of wine to any one consumer in New Hampshire in any calendar year. There is also no shipping to dry town Ellsworth, New Hampshire.
• Wyoming: Christie's is obligated to collect a fee of twelve percent (12%) of the hammer price plus buyer’s premium (exclusive of sales tax) prior to any shipments of wine. The fee covers the cost of filing a report with that state. Christie's may not ship more than 108 liters to any one household in Wyoming within any twelve (12) month period.

Capital Gains Tax (CGT): In the UK, disposals of chattels (tangible moveable property) which are wasting assets are exempt for the purposes of TCGA92, as stated by HMRC. That exemption falls away where Capital Allowances were or could have been claimed, or where TCGA92/S45(3B) applies. HMRC notes that some assets may naturally have a predictable life not exceeding 50 years. GOV.UK further clarifies that you do not pay Capital Gains Tax on anything with a limited lifespan, like clocks, unless used for business. However, you may have to pay Capital Gains Tax if you make a profit ('gain') when you sell a personal possession for £6,000 or more, according to GOV.UK. If you own a possession with other people, you are exempt from paying tax on the first £6,000 of your share. Gifts to your husband, wife, civil partner, or a charity are also exempt from CGT, as per GOV.UK. Understanding these tax implications is a key part of fine wine investment.

What are the practicalities of selling wine through auction?

Selling wine through auction involves several practical considerations, from condition assessment to shipping. Christie's acts as an agent for the seller, and the property is sold "as is."

Condition Reports and Inspection: Christie's strongly advises prospective buyers to examine personally any property that interests them, before the auction takes place. Condition reports are usually available on request, according to Christie's. Neither Christie's nor the seller provides any guarantee in relation to the nature of the property. References in the catalogue entry or the condition report to damage or restoration are for guidance only. The bidder or a knowledgeable representative should evaluate them by personal inspection. The absence of such a reference does not imply that an item is free from defects or restoration. Nor does a reference to particular defects imply the absence of any others, Christie's states.

Collection and Storage: Christie's expects buyers to remove their property within 30 calendar days of the auction. Unless otherwise agreed, it is the buyer’s responsibility to pick up purchases or make all shipping arrangements. Some buyers fail to collect lots within 120 calendar days of the conclusion of the auction. Christie's will then store the lots at the buyer’s expense and risk with a third party, The Wine Cellarage, at its New York storage location.

Shipping: Christie's may only ship wines to states where they have appropriate licenses and/or permits, currently New York, Florida, New Hampshire, and Wyoming. For international shipping, Christie's offers shipping to Hong Kong and London. The house notes that wines may take longer than 30 days to arrive, and that it does not ship during months of extreme heat or cold. For other international locations, Christie's can recommend a third-party shipper. It is the buyer's sole responsibility to determine before bidding whether wines can be shipped from or into any state or jurisdiction. The buyer must also obtain any required permits or licenses. This is a critical consideration for those looking at how to buy wine at auction as well.

Authenticity Warranty: Christie's offers an authenticity warranty to the original buyer under specific conditions. The buyer must send Christie's written notice within 21 days of the sale date that the lot was short, or that a statement of opinion in the catalogue was not well founded. The lots must also be in Christie's possession in the same condition within 14 days of such notice, and the buyer must satisfy Christie's. The sale may then be set aside and the purchase price refunded. However, the buyer has no rights under this condition if the defect is mentioned in the Sale Particulars, or if the Sale Particulars align with generally accepted expert opinion. The same applies if the defect could only be established by a scientific process not generally accepted at the time of sale, or by one that was unreasonably expensive or damaging. The benefit of this warranty is not assignable and rests solely with the original buyer. Provenance, the ownership history, is a key component of authenticity. Consult our wine provenance guide for more.

What should you consider before selling older vintages?

Selling older vintages requires specific attention to their unique characteristics and potential vulnerabilities. Christie's explicitly states that buyers of old wines must make appropriate allowances for natural variations of ullages, conditions of cases, labels, corks, and wine. Corks over twenty (20) years old begin to lose their elasticity. Levels can also change between cataloguing and sale. Old corks have been known to fail during or after shipment. Christie's repeats that there is always a risk of cork failure with old wines and due allowance must be made for this. Under no circumstances can a return be accepted or an adjustment of price or credit be made after delivery. The only exception is the specific terms stated in paragraph 5 of Christie's Conditions of Sale. Proper wine storage throughout its life is critical for maintaining condition and value, especially for older bottles.

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