The Commonwealth Parliament implemented the Resale Royalty right for visual artists in Australia on June 9th, 2010. This system offers an additional income source for visual artists and their heirs. Visual artists typically only profit from the primary sale of their artwork. At the same time, other creative works, such as books and music, commonly generate royalties over time.

The Resale royalty applies exclusively to original “works of visual art” created by an artist or group of artists or produced under their authority. It excludes works that are mass-produced or produced in unlimited editions, such as souvenirs.

Works of visual art

The term “works of visual art” encompasses a variety of mediums, including but not limited to paintings, sculptures, photographs, installations, digital artworks, video artworks, drawings, prints, ceramics, glassware, tapestries, carvings, collages, multimedia artworks, fine art jewellery, and batiks.

The royalty doesn’t apply to buildings, a literary/dramatic/musical work manuscript, or a drawing/plan/model for a building or circuit layout. To be eligible for a resale royalty, the purchaser must pay a minimum sale price of $1,000.00 (including GST but excluding any buyer’s premium or other taxes). Any sales under $1,000.00 won’t be subject to the royalty.

Resale

The resale royalty only applies to “commercial resales” that involve a change of ownership in exchange for money (not the first change of ownership) and the involvement of an “art market professional.” Art market professionals include auctioneers, art galleries, museums, art dealers, and anyone else “otherwise involved in the business of dealing in artworks.”

The resale royalty won’t apply to a first change of ownership. Still, it will apply to the second change of ownership from the commencement date (June 9th 2010) for artworks already existing on that date. It doesn’t matter if the first change of ownership wasn’t a “commercial resale” (e.g., if it was a gift or inherited under the terms of a will) as long as the subsequent resale meets the criteria.

The collecting society collects monies due to individual artists, beneficiaries, and their agents under the scheme. The assumption is that most artists won’t have to collect money due to them under the scheme.

Royalty

The Resale Royalty Right for Visual Artists Act 2009 (the Act) provides a 5% royalty payable to visual artists on certain commercial sales of their work. The Commonwealth Parliament created this entitlement on June 9th, 2010. 

Original works of visual art, including paintings, photographs, prints, sculptures, tapestries, artists’ books, video artworks, textile artworks such as batiks and weavings, drawings, engravings, fine art jewellery, glassware, carvings, ceramics, and digital and multimedia artworks, are subject to the resale royalty. It doesn’t apply to mass-produced items (such as posters or souvenirs), buildings, architectural plans, circuit layouts, or manuscripts.

The royalty will be payable if the sale occurs after June 8th, 2010 (the Commencement Date), is a “commercial resale,” is the second transfer of ownership after the Commencement Date, and has a sale price of at least $1000 (the threshold as of November 2010) including GST.

Commercial resale

A “commercial resale” is a sale for money (not a gift, donation, or exchange for goods or services) that isn’t the first transfer of ownership and involves an art market professional.

An art market professional is

• an auctioneer,
• the owner or operator of an art gallery,
• the owner or operator of a museum,
• an art dealer, or
• anyone else “otherwise involved in the business of dealing in artworks.”

Who is entitled to receive the resale royalty? 

The resale royalty is given to the artist or their beneficiaries, even if the artist does not hold the copyright. The beneficiaries are entitled to the royalty if the artist has passed away and they satisfy the residency and succession tests. 

The residency test 

The artist must meet a residency test during the commercial resale, which can be satisfied if they are an Australian citizen, permanent resident, or citizen of a country with resale royalty legislation and a reciprocal arrangement with Australia. 

Works created by more than one artist 

If multiple artists created the artwork, each living artist who satisfies the residency test and the beneficiaries of any artist who satisfies the residency test at the time of death would hold the royalty. Each artist in this situation is entitled to an equal share of the resale royalty unless they have agreed to apportion shares differently. An artist cannot sell, assign or transfer their entitlement to resale royalty to anyone except an artistic co-creator, except as permitted under the succession test. 

For how long will the resale royalty be paid? 

The resale royalty right applies to all eligible commercial resales until the end of 70 years after the artist dies. 

Who must pay the resale royalty? 

The seller, buyer, and art market professional involved in a commercial resale of artwork are jointly liable to pay the royalty. 

How is the resale royalty collected? 

Copyright Agency Limited (CAL) is the collecting agency responsible for collecting and distributing the resale royalty, and artists must register with CAL to receive their payments. CAL levies a 10% fee on the amounts collected to cover its costs. 

CAL’s obligations under the Act include:

• a. publishing information about commercial resales of artwork on its website;
• b. collecting the resale royalty; and
• c. distributing the resale royalty.

CAL will levy a 10% fee on the amounts it collects to cover its costs.

To receive their resale royalty payments from CAL, artists should register their details with CAL.

CAL will establish reciprocal arrangements with other countries with resale royalty schemes, such as the UK, France and Germany, to facilitate the collection and distribution of royalties payable to Australian artists of resale on sales that occur in those countries and the payment of royalties payable to overseas artists concerning sales of their artwork in Australia.

An artist or beneficiary who does not want CAL to collect the resale royalty for a particular resale must notify CAL in writing within 21 days of the publication on CAL’s website. They can then recover the resale royalty directly from the buyer, seller, or art market professional.

What obligations do art market professionals and sellers of artwork have? 

The Act requires market professionals and sellers to send CAL information about every commercial resale after the Commencement Date.

That information must be in writing and provided within 90 days of the date of the commercial resale. It must include sufficient information for CAL to calculate the resale royalty payable and identify who is liable to pay it.

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