New Oz Art Resale Royalty Scheme – artmarketblog.com

danglingcarrot New Oz Art Resale Royalty Scheme   artmarketblog.comThe details of the Australian resale royalty scheme for visual artists were announced by the Australian government yesterday which are due to take effect from July 1 2009 if the bill is passed when introduced to the parliament. The defining and most controversial characteristic of the proposed scheme is that the royalty will only be payable on the sale of works of art sold through the secondary market where the seller has acquired the artwork after the legislation takes effect (anticipated to be July 1 2009). What this means is that if someone wants to sell an original work of art after July 1 2009 and acquired the work prior to July 2009 a resale royalty will not be payable. The sale of the work by the person who purchased the work from this person will, however, attract a resale royalty as it was acquired by this person after July 1 2009 . Basically, once the legislation takes effect any work sold on the secondary market after July 2009 that was acquired by the seller after July 1 2009 will require the liable party (will be joint and several liability) to pay the royalty. Any work sold on the secondary market after July 1 2009 that was acquired by the seller prior to July 1 2009 will not require the payment of the resale royalty.

For practicing artists this means that they will have to wait for the work to be sold on the secondary market for the first time to receive a royalty for works that they created after the legislation takes effect and will have to wait for the second sale of the work on the secondary market to receive a royalty for works that they produced and sold prior to the legislation taking effect. For deceased artists whose work is still in copyright, the heir of the deceased would receive a royalty on works sold by a seller on the secondary market who acquired the work after the legislation takes effect. The heir would, however, have to wait to receive a royalty for works sold on the secondary market that were acquired prior to the legislation taking effect until the work is sold by the person who purchased the work from the person selling that work who acquired the work prior to the legislation taking effect.

If you think that this scheme sounds overly complicated and difficult to administer then you would be right. According to Michael Keighery who is the Chairman of the board of Viscopy, a visual arts copyright agency based in Sydney said “It is going to be very difficult to track and verify whether the work has been resold before or not” (Sydney Morning Herald article by Louise Schwartzoff October 4 2008). Keighery’s concerns are extremely valid because the number of people who keep records of the date that they purchased a work of art will be limited and even those who do have proof of the date of purchase could potentially give false details regarding the date to avoid paying the royalty.

To be continued…

For further information on the new Australian visual arts resale royalty scheme visit http://www.arts.gov.au/artists/resale_royalty

 New Oz Art Resale Royalty Scheme   artmarketblog.com**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.comt New Oz Art Resale Royalty Scheme   artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

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  • http://www.artmarketsurvey.com Adam

    Hey Nick,

    Thanks for the interesting info. Have you considered doing a top 10 art publications post? Or perhaps a top 10 website list on where to get your art market information?

    Cheers,
    Adam

  • http://www.securitizedarts.com Andrew Richard

    Hi Nicholas. Great post.

    We have a similar law in California, the Resale Royalties Act (RRA of 1976). I suspect your law may be modeled after ours since the terms are similar.

    I started securitiedarts.com to deal with any ofthe problems you address and then some.

    Several years ago I left the finance industry to start a company (SecuritizedArts.com) to deal with the enforcement of the RRA for artists. This was also based on a thesis I developed in public policy grad school, concerning inefficiencies in the art market and the potential of ultra-long-term options to lose them.

    I’ve just started publicizing the company this year, so I need feedback and would love your opinion of the site, idea, presentation, etc.

    And, if what I’m doing can help Australian artists that’d really be great too. There is no reason I couldn’t modify the contracts to mesh with Australian law.

    Benefits of our approach are:

    It’s pro-artist, rather than pro patron;

    It allows artists to effortlessly track and control their work over their lifetime;

    it strengthens the enforcement of an otherwise “toothless” law;

    it extends rights to ALL sales, regardless of price level;

    it creates price transparency and “liquidity” (facilitating sales) in a traditionally opaque market;

    and, perhaps most important to me, it allows lower-income buyers to buy real art — bringing together folks who would not otherwise be able to afford real art with the artists unsold inventory — a win-win proposition.

    Artists can place work with non-traditional buyers, lowering the price to a true “market-clearing” level, later buying it back when conditions are favorable, at no loss in value to their potential estate.

    We also provides artist with asset and legacy management strategy and services for both heirs and institutions.

    I’d love to get the word out if you find it worthwhile.

    Best wishes,
    Andrew Richard
    San Diego
    California, USA
    (619) 341-4278

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