When an artist sells a painting, that first sale is usually the end of the money trail. If the work is later resold for a higher price, the artist has often seen nothing from it. Australia’s resale royalty scheme was set up to change that. It gives visual artists a small share of certain later sales of their work.
The scheme runs under the Resale Royalty Right for Visual Artists Act 2009. Copyright Agency is the collecting society that manages it. This post covers how the royalty works, who can receive it and what galleries and dealers need to know.
How the royalty works
The royalty is 5 per cent of the sale price. It applies when an eligible artwork is resold commercially for $1,000 or more. The Arts Law Centre of Australia notes that the $1,000 figure includes GST. According to the Australian Government resale royalty scheme page, auction houses and galleries must report resales to Copyright Agency.
Working out the royalty is simple arithmetic. Take the full sale price and multiply it by 5 per cent. On a resale of $1,000 the royalty would be $50, and on a resale of $10,000 it would be $500. A work that resells for less than $1,000 attracts no royalty at all.
Copyright Agency decides whether a resale is eligible. It then collects the royalty and pays the artist or the people who hold the right. Artists can register with Copyright Agency at any time. Arts Law states that royalties apply to sales after 9 June 2010.
What counts as a commercial resale
Not every sale attracts a royalty. The sale must be for money, not a gift, donation or swap for goods or services. It must not be the first transfer of ownership, such as the artist selling the work to a buyer. It must also involve an art market professional.
Art market professionals include auctioneers, art dealers and the owners or operators of galleries and museums. Anyone else in the business of dealing in artworks can also fit. A private sale between two collectors with no professional involved is not covered. For online sales, it depends on whether a professional is the buyer or the seller.
Which artworks are covered
The scheme covers original visual artworks by one artist or by artists working together. Examples include paintings, photographs, prints, sculptures and ceramics. Digital and multimedia works are covered too. Mass produced items such as posters and souvenirs are not, and neither are buildings, architectural plans or manuscripts.
Graphic designers working on client briefs sit in a different space. Commercial work such as designing infographics is usually made for a client and shared widely rather than sold as an original artwork. The scheme is aimed at original pieces such as paintings, prints and sculptures. A design printed and shared in large numbers sits outside that idea of an original artwork.
Who can receive the royalty
Living artists must be Australian citizens or permanent residents. Citizens of countries with reciprocal arrangements with Australia can also qualify. Where a work is made by more than one artist, each eligible artist gets an equal share unless they all agree otherwise. The right cannot be sold or transferred to anyone except another artist who helped create the work.
The right also continues after death. A beneficiary who inherits it under a will or intestacy laws may claim if both they and the artist meet the residency test. Royalties stop 70 years after the artist’s death. That makes the right part of an artist’s estate and worth including when securing your financial future.
The overseas reciprocal countries
Since 31 March 2024, the scheme also covers eligible resales in 17 reciprocal countries. Royalties there are paid under each local collecting society’s arrangements. The countries include the United Kingdom, France, Germany, Ireland, Italy, Spain and the Netherlands. The full list also covers Austria, Belgium, the Czech Republic, Denmark, Finland, Hungary, Latvia, Norway, Portugal and Sweden.
This matters for Australian artists whose work sells through European galleries and auction houses. More than 60 of the 167 countries that are party to the Berne Convention have a resale right for visual artists. Australian artists can now receive royalties from eligible sales in the reciprocal countries. Citizens of those countries can also qualify for resales here.
What sellers and galleries need to do
The seller, buyer and art market professional are generally jointly liable to pay the royalty. Art market professionals and sellers must report each commercial resale in writing within 90 days. The report goes to Copyright Agency. Keeping clear sales records makes this reporting simpler.
Buyers are part of the scheme too. When you buy an eligible work through a gallery, dealer or auction house, you can be jointly liable for the royalty. The professional and the seller are the ones required to report the sale within 90 days. Asking how the royalty will be handled before you pay is a sensible step.
For artists, a clear record of where your work has sold helps too. A simple website with a portfolio and exhibition history makes it easier for buyers and dealers to confirm who made a piece. The statistics that should influence your next website design are worth reading before you build one. Tracking where and when your work resells can also guide predictive marketing for future shows.
Frequently asked questions
Do I get a royalty on the first sale of my artwork?
No, the first transfer of ownership is excluded. That includes the artist’s own sale to a buyer, a gift or an inheritance. The royalty only applies to later commercial resales.
Does a private sale between collectors count?
No, not if no art market professional is involved. The scheme needs an auctioneer, gallery, dealer or similar professional to be part of the sale. Online sales depend on whether a professional is the buyer or seller.
How long do sellers have to report a resale?
Art market professionals and sellers must report each commercial resale in writing within 90 days. Reports go to Copyright Agency, which decides whether the resale is eligible. The seller, buyer and professional are generally jointly liable for the royalty.
Can the royalty pass to my family?
Yes, the right can be inherited under a will or intestacy laws. The artist and the beneficiary must both meet the residency test. Royalties continue until 70 years after the artist’s death.
Further detail is in the Arts Law information sheet on the resale royalty right. This article is general information about Australian law and is not legal advice. Laws and processes can change, and rules for wills and estates differ between states and territories. Speak with a qualified lawyer about your own situation.