The process of artists and royalties
The Resale Royalty Right for Visual Artists Act 2009 (Cth) allows visual artists to earn a royalty for secondary sales of their artworks. This provides visual artists with a revenue stream that extends beyond the initial sale of the work.
Given the length of time for which resale royalty rights are effective, it is important for artists to plan how to make best use of them over the long term as part of the estate planning process.
When are visual artists entitled to a resale royalty?
An artist is entitled to a resale royalty payment in the event that there has been a ‘commercial resale’ of an original piece of their visual art and if the artist is a ‘resident’ at the time that the ‘commercial resale’ took place.
A ‘commercial resale’ is a secondary sale of an artwork which has the following features:
- The ownership of the artwork was transferred from one person to another.
- The purchaser of the artwork paid $1,000 or more, including GST, for the artwork.
- The sale was conducted by or through an ‘art market professional’, such as an auctioneer, art gallery operator, museum operator, art dealer or other person who conducts business in the sale of artworks.
An artist will be a ‘resident’ for the purposes of the act if he or she was a citizen of Australia, a permanent resident of Australia, or a permanent resident of a reciprocating jurisdiction at the time of the commercial resale.
How much is the resale royalty?
Visual artists are entitled to a royalty of 5% of the purchase price in any ‘commercial resale’. Generally, the vendor will be to pay this amount.
How long does the resale royalty right continue for?
Artists and their successors can enforce the resale royalty right for 70 years after the last day of the calendar year in which the artist dies.
Can the resale royalty be assigned or bequeathed?
Resale royalty rights cannot be assigned or sold. This does not prevent artists from assigning the income or monies earned as a result of a resale royalty right to another person, so long as the legal entitlement to the royalty rests with the artist.
Resale royalty rights can, however, be bequeathed to successors in a Will, if:
- The artist was a citizen of Australia, a permanent resident of Australia, or a permanent resident of a reciprocating jurisdiction at the time of his or her death.
- Each of the successors under the Will are citizens of Australia, permanent residents of Australia, or permanent residents of a reciprocating jurisdiction at the time of the relevant commercial resale.
- The successor under the Will is an individual, a charity, a community body, or a trustee who holds the right in trust for and individual, a charity or a community body.
We can help you make the most of resale royalty rights
Our experienced solicitors can help artists to enforce their resale royalty rights and plan the distribution of those rights under their Wills.
We can also assist art galleries and auction houses to comply with their requirements to pay resale royalties.
Call JFMLAW now to discuss your royalty rights situation.