Selling
Detailed Discussion
Artists sell their work to its first buyer. A 'resale' of the work occurs when the work is sold again, by someone other than the artist.
Resale Royalty entitles visual artists to a 5% royalty on certain resales of their artwork to acknowledge the ongoing relationship artists have with their work. It also reflects that an artists' work often increases in value over the course of their career. In many instances the first sale of a work will be for a much lower amount than any subsequent resales after the artist has gained some recognition. This has particular implications for many First Nations artists as their work often increases in value in the secondary art market. The Resale Royalty Scheme allows the artist to share in the profits being made from their work in the secondary art market.
Current Conditions
How Does it Work?
The Copyright Agency has been appointed by the Federal Government to manage the scheme. Art market professionals and other businesses involved in the sale of art are legally required to report any secondary market sales to the Copyright Agency within 90 days of the transaction taking place. If the sale meets the eligibility criteria outlined in the legislation, the Copyright Agency collects the royalty and passes it on to the artist.
Which Works are Covered?
Resale Royalty covers:
artists’ books
batiks
carvings
ceramics
collages
digital artworks
drawings
engravings
fine art jewellery
glassware
installations
lithographs
multimedia artworks
paintings
photographs
pictures
prints
sculptures
tapestries
video artworks
weavings
Limited edition reproductions, such as numbered prints, attract Resale Royalty if their production was overseen by the artist.
When is a Royalty Payable?
The royalty only applies to ‘commercial resales’ which refers to a transfer of ownership in exchange for money.
A royalty is payable on a commercial resale when:
a sale has taken place for $1,000 or more
the seller acquired the work after 8 June 2010
the artist is an Australian citizen or permanent resident at the time of resale
an ‘art market professional' was involved in the transaction (including auctioneers, art galleries, museums, art dealers and any other person ‘otherwise in the business of dealing in artworks’)
the work was sold during the life of the artist or within 70 years following the end of the year of the artist's death
A royalty is not payable on private transactions between individuals.
Legal Requirements
The Resale Royalty scheme is created by the Resale Royalty Right for Visual Artists Act (2009). The Copyright Agency has been appointed by the Australian Government to collect and pay royalties to artists on resales of artworks.
Responsibilities of Market Professionals
Market professionals have an obligation to:
ensure the Resale Royalty is paid, if it is required
report the following information about resales of artworks to the Copyright Agency, or instruct the seller to do so, within 90 days of the sale:
the sale date
whether the seller acquired the work after 8 June 2010
the sale price
a description and/or image of the work
the title of the work
the name of the artist
whether the artist is living or deceased and, if deceased, the year of death
the artist’s nationality or residency
In some circumstances where the title of the work and/or details about the artist are not known, the Copyright Agency may not require them, provided the royalty is paid.
The report must be made on resales over $1,000 (including GST) regardless of whether a royalty is required.
Reports may be made through the Resale Royalty website.
Responsibilities of Artists
It is recommended that artists register their details with the Copyright Agency at the Resale Royalty Registration site. However, if an artist is unregistered prior to the collection of the royalty, the Copyright Agency is obliged by law to use its best endeavours to identify, locate and pay the rights holder.
The Copyright Agency takes a 16.5% (including GST) fee to cover administrative costs when it collects royalties. Artists may choose to collect a royalty themselves or appoint an agent to collect it on their behalf. If the artist chooses not to have the Copyright Agency collect the royalty, they must notify the Copyright Agency within 21 days of the date when the Copyright Agency publishes a notice about a resale of the work on its website. A separate notification must be made regarding each individual resale.