After studying law at the University of Vienna, Josef Blauhorn joined the Prager Eisenindustrie-Gesellschaft, before becoming sole Prokurist in 1916 of the Vienna bank Gebrüder Gutmann, where he worked until escaping from Austria in 1939. He was also member of the board of Hanf-, Jute- und Textil-Industrie AG and of the supervisory board of Österreichische Waffenfabriks-Gesellschaft and a partner in the Vienna trading company M. G. Pinter & Co. With his wife Auguste ("Gusti", née Koppel, 1886–1961) and three children Karl Max, Anna Lisbeth and Hans Georg he lived initially at Esteplatz 8 in Vienna's 3rd district. In 1924 the family moved to Döbling, the 19th district, where they lived in a villa at Grinzinger Allee 54. The family had a valuable art collection there consisting of around 200 works, mostly by Austrian nineteenth- and twentieth-century artists. In Auguste's asset declaration filled out after the annexation of Austria in 1938 on account of her Jewish origins—Josef's list has been lost since 1947—the assessor Ambros Moritz put the value of the collection at almost 67,000 Reichsmarks. In early 1939, when the Blauhorns were preparing to leave Austria, Josef applied for the first time for export authorization for the artworks, which was granted for all but ten items, which the Vienna city council department MA50 withheld as "valuable national property". From the withheld paintings, which were taken to the depots of the Österreichische Galerie and Zentralstelle für Denkmalschutz (Central Monument Protection Authority), the "Führer's special representative" acquired Franz Eybl's Grandmother at the Spinning Wheel. Rudolf von Alt's Prague Bridge was purchased by the University of Prague and later presented to Hitler as a gift. As the Vienna Gestapo and the Reichswirtschaftsministerium (Reich Ministry of Economic Affairs) were particularly interested in disposing of Blauhorn's assets, the remaining works were not exported and remained in Villa Blauhorn. The lawyer and trustee Hans Dechant arranged for the villa and securities to be used to pay the Reichsfluchtsteuer (Reich Flight Tax) of 284,000 Reichsmarks owed by Blauhorn. In return the Ministry of Economic Affairs considered allowing the "duty-free export of his household furnishings, picture collection (subject to approval by the monuments authority) and silver on account of his loyal attitude". After the works were still not shipped to London following the resubmission of his export request in March 1940, on 6 October 1941 the Vienna Gestapo ordered the seizure of his assets and the start of denaturalization proceedings for the Blauhorn family. Dechant, who saw his own revenue increasingly threatened, had petitioned the Oberfinanzpräsident (chief tax officer) in Vienna in an attempt to stop the seizure of Blauhorn's household assets. After his petition was rejected, he made a successful claim against Josef Blauhorn at the Vienna Landesgericht (provincial court) for payment of outstanding fees. Dechant was removed from office in May 1942 at his own request, to be replaced by Stephan Lehner as administrator. The Gestapo entered into sales negotiations regarding the villa with the Nationalsozialistischer Lehrerbund (NSLB) (National Socialist Teachers' Federation), which used the building thereafter as a training centre. The estimations made by Bernhard Witke, Julius Fargel, and Adolf Wawra in October 1941 on behalf of the Gestapo in Villa Blauhorn revealed that there were only fifty-four pictures remaining there, which Witke was to dispose of. They included a painting by Anton Eberth, acquired by the Neue Galerie of the Joanneum in Graz, while five other works were sold by the Dorotheum. The investigation ordered by Karl Ebner, deputy head of the Vienna Gestapo, into the whereabouts of the artworks that had disappeared since the last appraisal of Villa Blauhorn in 1939, produced no results. These events could be connected with the prosecution in 1943 of three members of the art commission in the Vermögensverkehrsstelle (Property Transaction Office) — Heinrich Höfflinger, Hans Kousek and Erich Sandruschütz — who had removed items from Villa Blauhorn and sold them. It is impossible today, however, to determine which precise items were involved.
Josef Blauhorn died in early 1944 in exile in London. In 1945, his widow married the jurist Rudolf Franz Bienenfeld, who had also escaped to London. Together with her sons Karl and Georg, who also survived in exile (daughter Anna Lisbeth had died in 1937), they applied unsuccessfully in October 1948 for restitution of the artworks. The villa itself was restituted. In 1959, the Joanneum in Graz came to an arrangement with the heirs regarding the Eberth painting. At the end of the century, the Blauhorn collection attracted the attention of Austrian provenance research. In 2012, the Art Restitution Advisory Board declared the sale by Hans Dechant of two paintings by Leopold Kupelwieser and Ludwig Ferdinand Schnorr to the Österreichische Galerie in June 1940 to be invalid. Dechant claimed that Blauhorn had given him these paintings as a "gift" or "in place of a fee". Two watercolours by Josef Kriehuber in the Albertina were restituted in 2013. They could be demonstrated to have been in Villa Blauhorn in 1939 before being sold in 1943 and 1944 by two private individuals, Gabriele Gross and her mother Mutter Luise Winter, to the "Führermuseum" and directly to the Albertina Graphic Art Collection. In 2014 the Jewish Museum Vienna restituted the portrait of Josef Blauhorn by Jehudo Epstein to Blauhorn's legal successors. The majority of Blauhorn's collection is still untraceable, however.