Would you buy a R$2,000 rug? Or how about another one that costs half a million reais? For some, it may seem strange that there is such a strong demand for pieces at these prices that a Persian rug store sells between 50 and 60 copies every month. But anyone who already knows this market knows that demand – and price – should increase from now on.
“We serve around 100 people a day who want to ask questions or are interested in finding out the prices”, says Alexandre Rodrigues, founder of Chão Persa Raridades. About a year ago, the lawyer made a “relevant” part of his collection available to kickstart the store. Now, he has difficulty finding Persian rugs available on the market: “I’ve been tirelessly searching for pieces for a month and I can’t buy them.”
Why buy a Persian rug?
The businessman explains that Persian rugs should be seen as works of art: “they are manual productions, each piece has its own configuration and has part of the artisan’s intellect expressed in that work”.
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Another important factor for those who buy is the value of the rugs. The number of artisans has been decreasing every year, which reduces the supply of these products and causes an appreciation in the value of the pieces. “There is an attempt to keep tapestry active with mechanization, but this only emphasizes manual work, as machines do not come close to the quality.”
Rodrigues states that half of customers come to Chão Persa Raridades to buy Persian rugs just as a decorative item, while the other half see the items as investment assets. In the first group, “people start to live with the rugs and realize that they don’t change, that the days go by and the wool remains high, which shows that, in addition to adornments, they can be investments that don’t lose value if maintained correctly”.
Some rugs are displayed on the wall, like paintings signed by painters, but the vast majority are used on the floor. The maintenance of the items also moves the market: Rodrigues had to hire two specialists in carpet maintenance, repair and cleaning, in addition to purchasing machines that beat the carpets and cost up to R$100,000, but this service has a major logistical barrier, as it depends on transport companies, which increases cost and risk.
Liquidity in the carpet market
Like any investment, there is a concern about liquidity. After all, the investor wants to know how long it will take to transform the asset into cash if necessary. Alexandre Rodrigues guarantees that sales are quick: “it is very easy to find buyers online or even in antiques stores; in addition, all the major art dealers are practically permanent buyers”.
He says that, recently, he became interested in a piece and asked the seller for some time to make a deposit, but the piece was sold soon after: “we no longer have time to think, the scarcity is making it very difficult”.
Who evaluates the carpets?
There are some factors that make a Persian rug worth R$100,000 or R$300,000. But the main one is the region where it was produced. Tabriz, Isfahan, Kashan are examples of Iranian cities with a tradition of producing Persian carpets. Each region has a production methodology that helps classify the quality of the works.
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“Isfahan are like the Ferraris of Persian carpets, they are noble and fine, made only with wool from the belly of the sheep, which has a minimum and maximum age requirement and a specific dye, while Hamadan, for example, are more tribal – the sheep is sheared uniformly, but there are no low-quality pieces”, explains Rodrigues.
The pricing of Persian rugs also passes through the state. The fringes are rigorously analyzed and must be in good condition. Rips and stains make pieces lose value. “Based on these characteristics, the market dictates how much each rug is worth.”
In recent years, however, the businessman states that even “extremely damaged” carpets that take around two years to restore have been sold. “There are two groups that buy these items, the first is those who like rugs with the signs of time and the other is made up of people who are aware of the scarcity of supply”.
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How does taxation work?
If there is a capital gain from the sale of a rug, Income Tax is charged on the difference between the sale and acquisition value, with rates that vary between 15% and 22.5%, depending on the amount earned, explains Luisa Macário, tax lawyer and partner at Macário Menezes Advogados. If the gain from sales is up to R$35,000 in a month, the capital gain is exempt from IR.
Macário says that, even before the sale, the asset must be included in the Personal Income Tax Declaration (DIRPF), in the group “Movable Assets – Works of art, antiques and collectibles”, for the acquisition value. “This value should not be updated in subsequent declarations, with the tax only being due at the time of disposal, when there is a profit”.
If a consumer buys a Persian rug for R$30,000 and sells the item for R$200,000 later, the gain of R$170,000 would be subject to 15% income tax, according to the lawyer.
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“If the carpet has an artistic, historical character or is signed by a recognized artist, it can be treated as a work of art for asset classification purposes, but this does not change the tax rule on capital gains. In more relevant collections, it is recommended to consider specific asset structures (such as holdings) for organization and succession planning purposes”, says Luisa Macário.
