Last updated 24 August 2016

The resale royalty entitles artists to a percentage payment when a work of art that they have created is resold.

According to the Resale Royalty Right for Visual Artists Act 2009 (Cth) (Resale Royalty Right for Visual Artist Act), the resale royalty right, which subsists for 70 years after the death of the artist (calculated from the end of calendar year in which the artist died (s 32)), is inalienable (s 33) and unable to be waived (s 34). It is, however, able to be transferred upon death of the artist to a successor in title (s 12). The resale royalty right only applies where the holder of the right (either the artist or their successor) is an Australian citizen, a permanent resident of Australia, or a national or citizen of a prescribed reciprocating country (s 14). The scheme grants artists a royalty on the resale of original artworks. More specifically, royalties are received from resales of original works of visual art sold through the secondary art market where the seller has acquired the work after the legislation takes effect and the work is resold for a minimum of $1000 (s 10(1)(a)). The resale royalty scheme applies to original works of visual art, which are defined in the Resale Royalty Right for Visual Artist Act to include items such as paintings, sculptures, drawings and engravings, along with applied or decorative arts such as jewellery, glassware, ceramics and tapestries, installations, digital video and multimedia artworks (s 7). Buildings, plans or models for buildings, circuit layouts and manuscripts are expressly excluded from the definition (s 9).

The new scheme only applies to works created on or after the date of commencement of the Resale Royalty Right for Visual Artist Act (s 11) when they are later resold through the secondary commercial art market (s 8). The royalty is calculated on the sale price when an artwork resold after the first transfer of ownership in the commercial market. The royalty rate payable is 5% of the sale price of the commercial resale of the artwork (s 18).

To ensure that the resale royalty scheme operates effectively, a collecting society was established to collect resale royalties and enforce resale royalty rights on behalf of the holder of resale royalty right (ss 22–31). The task of administering the resale royalty scheme was granted to Copyright Agency Ltd (CAL), the collecting society established to deal with the reproduction of literary works. In administering the resale royalty scheme, CAL is required to publish information about commercial resale that it is aware of on its website as soon as it is reasonably practicable (s 22). If the holder of a resale royalty right does not notify CAL within 21 days post publication that it does not want the collecting society to collect royalties or enforce relevant rights (ss 23(1)–(3)), CAL is obliged to collect and distribute royalties and to enforce rights. In addition, vendors (directly or through their agents) must provide CAL with sufficient information about all commercial resales for CAL to ensure (together with the buyer and seller) that royalties are paid to CAL to transfer to artists and their beneficiaries. This information can be provided to CAL by galleries, auction houses or dealers.