FAQs

Frequently asked questions. If you have a question you need a response to please submit this to us via the contact form here

For Art Market Professionals

  • How does the scheme affect Art Market Professionals?

    There are legal obligations for Art Market Professions which require them to:

    • report qualifying resales of original visual artworks to RRA; and
    • pay to RRA* the resale royalty payable in respect of each qualifying resale.  The seller is also jointly & severally liable for payment.  

    These are explained in our Guide: Information for Art Market Professionals.

    Please register to stay informed about your obligations under the scheme, and to receive administrative support with compliance.

    (*This assumes the Art Market Professional is acting as agent for the seller on a resale.   In cases where there is no agent for the seller, then instead the buyer’s agent or the buyer will be jointly liable with the seller to make payment).

  • Who is an Art Market Professional?

    The Act defines “Art Market Professionals” in section 11 as:

    (a) a person who carries on business as an auctioneer (within the meaning of section 5(3) of the Auctioneers Act 2013):

    (b) an art dealer:

    (c) an art consultant:

    (d) the owner or operator of an art gallery that deals in visual artworks:

    (e) any other person who is in the business of dealing in visual artworks.

  • How much is the resale royalty payment?

    The amount is the same for both eligible artists and successors, a 5% royalty will be collected for eligible artists each time there is a qualifying resale of their original visual artwork. 

    The collection and distribution of the payment is managed by RRA, a not-for-profit.  RRA will retain 20% for the purpose of funding RRA operations and distribute the remainder of the royalty to the visual artist or successor.

  • Who is liable to pay the resale royalty?

    The following persons are jointly and severally liable to pay the 5% resale royalty to RRA (section 17, of the Act) :

    • The seller, and either
      • the agent acting for the seller on the resale (usually the AMP); or
      • if the seller does not have an agent, the agent acting for the buyer on the resale; or
      • if there are no agents, the buyer.

  • RRA policy on non-compliance

    (sections 26 & 27, the Act) 

    If a liable person fails to pay a resale royalty, or fails to provide the required reporting information, or if any other requirement of the Act is not complied with, then the Act provides that the Collection Agency may apply to a court for orders enforcing these obligations, and for any other order that is appropriate for an infringement of a property right.  The Act provides that this does not limit any other proceeding that may otherwise be taken by the Collection Agency, a right holder, or any other person affected.  Nor does it limit any other power of the court.  

  • How will the scheme work for galleries who often buy at auction to re-sell? Will the royalty be payable twice?

    A royalty is payable on each resale.  

    Who is liable in each instance is answered by section 17 of the Act.  The seller is always liable, and generally their agent will be jointly and severally liable.  Generally a buyer won’t be liable unless no agent is involved.  

    To give two contrasting examples:

    Where a gallery buys from an auction house or art consultant (who is acting behalf of a seller), the liable parties will be the seller and the seller’s agent (i.e. auction house or art consultant).  It’s unlikely the purchasing gallery would be liable in this scenario (unless the seller actually has no agent, and the buyer has no agent). 

    Where a gallery buys directly from another gallery (without using any agents), then the buying gallery will indeed be jointly liable with the selling gallery to pay the royalty on the purchase.   (How the two galleries share this liability will be a private matter).  The buying gallery will then be liable as a seller if/when they come to resell.  

  • AMPs have differing costs associated with resales.  Is it fair that AMP’s costs aren’t factored into the calculation of the royalty

    Art market professional’s concerned about whether the royalty accounts for differing AMP costs should note that the royalty is calculated exclusive of (i.e. disregards) any costs associated with the resale.   

    This leaves it up to the art market professional, the buyer, and the seller, to freely agree their costs, premiums, commissions etc and determine what is, in their particular circumstances, fair and lawful between them.   

    It is not the purpose or function of the legislation to presume, dictate, or discriminate those private commercial arrangements.  Instead, the legislation creates a predictable royalty by using a fixed percentage of the resale value.  This is the same for every qualifying resale, and every liable AMP. 

    This creates benefits to art market professional and artists alike.  Negotiation, custom, and freedom of contract, will determine fairness between parties to the resale contract as to their own costs, premiums etc.  And whatever they freely decide about those (and however that varies case-by-case), won’t prejudice or affect the “resale value” or the royalty total, which also ensures transparency and fairness to the artist.

  • How does it work when an art consultant facilitates a resale between two private parties?

    The resale is considered a professional resale because an art market professional is involved.  That means, provided it meets the standard criteria, it will be a qualifying resale.
     

  • How is the resale value calculated?

    The resale royalty payable is calculated at 5% of the “resale value” of the qualifying resale (section 16).

    Section 10 says that “resale value” means: “the value of the consideration given for the visual artwork under the contract for resale” which may include:

    • the amount paid in New Zealand dollars; 
    • the value of goods and/or services paid in kind;  
    • (if paid in another currency), the amount converted to NZD at the date of payment.   

    ‘Resale value’ does not include:

    • goods and services tax (GST; or
    • duties, levies, or taxes (etc) under the Customs and Excise Act 2018; or
    • “any costs associated with the resale, for example, a commission or a buyer’s premium” 

  • How does Section 7(3) of the Act relate to “commissioned” artwork?

    Section 7(3) of the Act states “An artist has a right under this section irrespective of whether they are or were the first owner of copyright in the artwork.”

    This means that if the artwork was “commissioned” (as per Section 21(3) of the Copyright Act), then the artist who created the artwork is not the first owner of the copyright, and is still therefore potentially eligible for the artist resale royalty, as long as they are an “Eligible Artist”, the artwork is an “original visual artwork” by the artist, and the resale occurs before the right to receive the ARR has expired (see checklist 4 for more detailed information on when the ARR right expires).

  • How do you define ‘limited number of copies”? 

    The Act does not define what a limited number of copies is, although there is provision in the Copyright Act that a 3 Dimensional artwork that has fewer than 50 copies produced is copyright protectable, so this might be a useful benchmark. We suggest using good faith best efforts to do your due diligence in researching, and keep a record of your research in case it is needed at a future date.  If you have any concerns or want to discuss then please just get in touch with us. 

  • Would the term to receive a resale royalty for a UK or Australian artist’s work that is a qualifying resale in New Zealand due to our reciprocal agreements be New Zealand’s term of 50 years, or their longer term of 70 years?  

    We are applying New Zealand’s legislation but it’s our understanding that this will change in the next few years when the NZ Copyright Act is reviewed. 

  • Has there been any consideration regarding the extension of copyright duration that will be enacted sometime in the next four years? 

    Currently the artist resale royalty will apply for 50 years after the death of the artist which aligns with New Zealand’s current Copyright Act. However our understanding is that the Copyright term will be extended prior 1 May 2028, and we would expect that the ARR term will then also be extended to align with the Copyright Act. 

For Artists

  • How much is the resale royalty payment?

    The amount is the same for both eligible artists and successors, a 5% royalty will be collected for eligible artists each time there is a qualifying resale of their original visual artwork. 

    The collection and distribution of the payment is managed by RRA, a not-for-profit.  RRA will retain 20% for the purpose of funding RRA operations and distribute the remainder of the royalty to the visual artist or successor.

  • What is an “original visual artwork”?

    Checklist 2.1:  If any of the following boxes are checked, the work is a “visual artwork”:  

    • cultural expressions of Māori or Pacific peoples;
    • painting, drawing, carving, engraving, etching, lithography, woodcutting, printing (including a book of prints);
    • sculpture, collage, modelling;
    • craftwork, ceramics, glassware, jewellery, textiles, weaving, metalware, furniture;
    • photography or video art;
    • multimedia art;
    • art created using computers or other electronic devices;
    • ethnic or cultural art that is a variation of any type of work described above in the 2nd through final bullets.

    However, visual artwork does not include:

    • a building*;
    • a dramatic work* or musical work*;
    • a literary work*, unless it is a compilation that includes a visual artwork.

    * (These terms are defined in s 2(1) of the Copyright Act 1993)

    Checklist 2.2: To be an “original”, the visual artwork must have been:

    • Created by, or under the authority of, the artist; or
    • One of a limited number of copies of visual artwork made by that artist or under their authority.

  • Who is an “eligible artist”?

    Checklist 3.1 IF the artist is alive at the time the contract for resale is entered into:  is the artist:

    • a New Zealand Citizen, or a person domiciled or resident in New Zealand; or
    • a citizen or subject of, or a person domiciled or resident in,  a “reciprocating country”

    If you ticked either of these boxes, then the artist is an eligible artist. 

    Checklist 3.2 IF the artist is deceased at the time the contract for resale is entered into:  at the time of their death was the artist: 

    • a New Zealand Citizen, or a person domiciled or resident in New Zealand; or
    • a citizen or subject of, or a person domiciled or resident in, a reciprocating country

    If you ticked either of the above, then the deceased artist is an eligible artist.  Although the eligible artist is deceased, the resale right is held by their successor(s) (meaning the successor(s) are entitled to payment of the royalty, provided they meet the same criteria for eligibility (above).

  • What do I need to do as a Visual Artist?

    Visual artists (and their successors):

    • Please register your interest with RRA to ensure timely payment to you. 
    • Registering your eligibility in advance greatly assists RRA to administer the scheme on your behalf.  It assists RRA to identify, collect, & distribute your royalty payments to you in a timely fashion

  • What can an artist do if they don’t want to accept a royalty? 

    How to decline payment (s 19 the Act, & clause 12 the Regulations) 

    A right holder may opt to decline to receive:  

    1. payment of all or part of a resale royalty; and / or  
    1. payment of a resale royalty on the future resale of any or all of their visual artworks.    

    They do this by giving written notice to RRA (the collection agency).   

    This doesn’t mean they lose their resale right.  It simply means they are opting to decline to receive payment of all or part of a resale royalty/ies. 

    Opting back in for future resales (s 19(3) the Act, & clause 13 the Regulations) 

    If the right holder has declined payment of a resale royalty on future resales, they may nevertheless opt back in to receive payments on future resales of any or all artworks previously declined.  They do this by giving written notice to the collection agency.   

    What happens to the declined royalty? (clause 14 the Regulations) 

    If a right holder declines to receive payment of any amount of a resale royalty, RRA must:  

    • transfer the amount to a cultural fund established under the Act; 
    • if there is no cultural fund established, return the amount to the person who paid the resale royalty under the Act; 
    • if there is no cultural fund, and the person who paid the royalty cannot be found, use the amount to fund the activities of the collection agency under the Act. 

    Can I get rid of, or repay, or sell, or share my resale right? 

    For artists: An artist cannot ‘alienate’ their royalty right during their lifetime (s 13).  This means an artist cannot lose, sell, license, assign, charge, or waive their resale right during their lifetime, and any agreement to do so is void (s 13(2)).   

    For successors:  A successor may transfer the resale rights they hold to another person, as personal property, by (a) assignment; or (b) testamentary disposition; or (c) operation of law (s 14(2)). 

    For both: Any agreement to repay the resale royalty is void (s 17), as is any agreement to share the royalty, except where the Act provides that a royalty can be held in shares e.g. where there are joint artists (s 12), or multiple successors (s 14(4)). 

  • Can the Auction House put a fee on top of the sale to cover that 5%? Is it on the hammer price? 

    The resale royalty payable is calculated at 5% of the “resale value” of the qualifying resale (section 16).

    Section 10 says that “resale value” means: “the value of the consideration given for the visual artwork under the contract for resale”. 

    This may include:

    • the amount paid in New Zealand dollars;  
    • the value of goods and/or services paid in kind;  
    • (if paid in another currency), the amount converted to NZD at the date of payment.   

    It does not include:

    • goods and services tax (GST; or
    • duties, levies, or taxes (etc) under the Customs and Excise Act 2018; or
    • “any costs associated with the resale, for example, a commission or a buyer’s premium” 

    So, the Auction House / Art Market Professional’s fees would be a cost or premium or commission associated with the resale, and are therefore excluded from the calculation of “resale value” or the royalty. 

    Auction Houses and other Art Market Professional’s must be cognisant of other rules in the Act that prohibit waiving, charging, repaying or sharing the royalty: 

    • An artist cannot ‘alienate’ their royalty right during their lifetime (s 13).  This means an artist cannot lose, sell, license, assign, charge, or waive their resale right during their lifetime, and any agreement to do so is void (s 13(2)). 
    • Any agreement to repay the resale royalty is void (s 17(5)), as is any agreement to share the royalty (except where the Act provides that a royalty can be held in shares e.g. where there are joint artists (s 12), or multiple successors (s 14(4)). 

  • How is the resale value calculated?

    The resale royalty payable is calculated at 5% of the “resale value” of the qualifying resale (section 16).

    Section 10 says that “resale value” means: “the value of the consideration given for the visual artwork under the contract for resale” which may include:

    • the amount paid in New Zealand dollars; 
    • the value of goods and/or services paid in kind;  
    • (if paid in another currency), the amount converted to NZD at the date of payment.   

    ‘Resale value’ does not include:

    • goods and services tax (GST; or
    • duties, levies, or taxes (etc) under the Customs and Excise Act 2018; or
    • “any costs associated with the resale, for example, a commission or a buyer’s premium” 

  • What is IRD tax guidance for artists?

    Read the full IRD ‘Resale payments for artists’ here.

  • How does Section 7(3) of the Act relate to “commissioned” artwork?

    Section 7(3) of the Act states “An artist has a right under this section irrespective of whether they are or were the first owner of copyright in the artwork.”

    This means that if the artwork was “commissioned” (as per Section 21(3) of the Copyright Act), then the artist who created the artwork is not the first owner of the copyright, and is still therefore potentially eligible for the artist resale royalty, as long as they are an “Eligible Artist”, the artwork is an “original visual artwork” by the artist, and the resale occurs before the right to receive the ARR has expired (see checklist 4 for more detailed information on when the ARR right expires).

  • What is the duration of the resale right period and will this change with the Copyright Act review?

    Section 15 of the Act states that the duration of the ARR right is 50 years from the end of the calendar year that the (eligible) artist dies, (or if 2 or more artists create the qualifying artwork, then 50 years from the end of the calendar year that the last surviving artist dies). This is the same duration as Copyright under the Copyright Act 1994, which would imply that the ARR is linked to the duration of Copyright however nothing in the legislation confirms this.

  • Would the term to receive a resale royalty for a UK or Australian artist’s work that is a qualifying resale in New Zealand due to our reciprocal agreements be New Zealand’s term of 50 years, or their longer term of 70 years?  

    We are applying New Zealand’s legislation but it’s our understanding that this will change in the next few years when the NZ Copyright Act is reviewed. 

  • What is the process for claiming an unpaid resale royalty?

    RRA will periodically inspect and audit published auction sale results to monitor compliance with the Act and Regulations.  However, because we rely on art market professionals and other stakeholders in the Scheme to notify us of resale payments that are due on qualifying resales, we may occasionally not be aware of a qualifying resale.

    A Right Holder who believes that a qualifying resale has taken place is encouraged to notify us through the “Contact Us” form available on our website. 

    Right Holders have 6 years from the date of the qualifying resale to notify us of any claim from the date of the resale.  After that period expires, we will have no liability to the Right Holder to collect or pay the resale royalty.

    If a Right Holder wishes to notify us of a resale royalty they think they are owed, they must provide us with:

    • Evidence that the person is the Right Holder
    • Evidence that the relevant resale is a qualifying resale
    • The names of the persons liable under section 17 of the Act to pay the resale royalty, if known.

    On receipt of such a notice from a Right Holder, we will use reasonable efforts to verify the claim.  If the claim is verified and we have not already processed the relevant resale royalty payment, we will notify the persons who are liable to pay the resale royalty of their obligations under the Scheme and follow our process set out above for collecting and distributing the resale royalty payment.  We will then have no further obligation to the Right Holder until we receive the resale royalty payment.  While we will use reasonable efforts to resolve claims, we cannot guarantee any particular outcome.

For Successors

  • How much is the resale royalty payment?

    The amount is the same for both eligible artists and successors, a 5% royalty will be collected for eligible artists each time there is a qualifying resale of their original visual artwork. 

    The collection and distribution of the payment is managed by RRA, a not-for-profit.  RRA will retain 20% for the purpose of funding RRA operations and distribute the remainder of the royalty to the visual artist or successor.

  • When does the resale right expire?

    In the case of deceased eligible artists, their resale right may or may not have expired.  A resale royalty will only be payable if the contract for the resale was entered into on or before the following expiry dates (as applicable):

    • (where the artwork is by a single artist) – the expiry date is 50 years from the end of the calendar year in which the artist died
    • (where the artwork was created jointly by 2 or more artists) – the expiry date is 50 years passed from the end of the calendar year in which the last of those artists died.

    If the resale contract was entered on or before the expiry date, a resale royalty is payable.

    If the resale contract was entered into after the expiry date, no resale royalty is payable.

    Deceased Artists:  After an artist’s death, the right to receive the resale royalty payment passes to their successor.  However, the successor must meet the same eligibility requirement to receive payment (meaning they are a citizen or domiciled or resident in New Zealand or a reciprocating country (or in the case of a body corporate, they are incorporated, registered, or carrying on business in New Zealand or a reciprocating country).

    However, in the case of deceased eligible artists, their resale right may or may not have expired.  To check an expiry date see STEP 4 in the Criteria section (above).

  • What can an artist do if they don’t want to accept a royalty? 

    How to decline payment (s 19 the Act, & clause 12 the Regulations) 

    A right holder may opt to decline to receive:  

    1. payment of all or part of a resale royalty; and / or  
    1. payment of a resale royalty on the future resale of any or all of their visual artworks.    

    They do this by giving written notice to RRA (the collection agency).   

    This doesn’t mean they lose their resale right.  It simply means they are opting to decline to receive payment of all or part of a resale royalty/ies. 

    Opting back in for future resales (s 19(3) the Act, & clause 13 the Regulations) 

    If the right holder has declined payment of a resale royalty on future resales, they may nevertheless opt back in to receive payments on future resales of any or all artworks previously declined.  They do this by giving written notice to the collection agency.   

    What happens to the declined royalty? (clause 14 the Regulations) 

    If a right holder declines to receive payment of any amount of a resale royalty, RRA must:  

    • transfer the amount to a cultural fund established under the Act; 
    • if there is no cultural fund established, return the amount to the person who paid the resale royalty under the Act; 
    • if there is no cultural fund, and the person who paid the royalty cannot be found, use the amount to fund the activities of the collection agency under the Act. 

    Can I get rid of, or repay, or sell, or share my resale right? 

    For artists: An artist cannot ‘alienate’ their royalty right during their lifetime (s 13).  This means an artist cannot lose, sell, license, assign, charge, or waive their resale right during their lifetime, and any agreement to do so is void (s 13(2)).   

    For successors:  A successor may transfer the resale rights they hold to another person, as personal property, by (a) assignment; or (b) testamentary disposition; or (c) operation of law (s 14(2)). 

    For both: Any agreement to repay the resale royalty is void (s 17), as is any agreement to share the royalty, except where the Act provides that a royalty can be held in shares e.g. where there are joint artists (s 12), or multiple successors (s 14(4)). 

  • How is the resale value calculated?

    The resale royalty payable is calculated at 5% of the “resale value” of the qualifying resale (section 16).

    Section 10 says that “resale value” means: “the value of the consideration given for the visual artwork under the contract for resale” which may include:

    • the amount paid in New Zealand dollars; 
    • the value of goods and/or services paid in kind;  
    • (if paid in another currency), the amount converted to NZD at the date of payment.   

    ‘Resale value’ does not include:

    • goods and services tax (GST; or
    • duties, levies, or taxes (etc) under the Customs and Excise Act 2018; or
    • “any costs associated with the resale, for example, a commission or a buyer’s premium” 

  • How does Section 7(3) of the Act relate to “commissioned” artwork?

    Section 7(3) of the Act states “An artist has a right under this section irrespective of whether they are or were the first owner of copyright in the artwork.”

    This means that if the artwork was “commissioned” (as per Section 21(3) of the Copyright Act), then the artist who created the artwork is not the first owner of the copyright, and is still therefore potentially eligible for the artist resale royalty, as long as they are an “Eligible Artist”, the artwork is an “original visual artwork” by the artist, and the resale occurs before the right to receive the ARR has expired (see checklist 4 for more detailed information on when the ARR right expires).

  • What is the duration of the resale right period and will this change with the Copyright Act review?

    Section 15 of the Act states that the duration of the ARR right is 50 years from the end of the calendar year that the (eligible) artist dies, (or if 2 or more artists create the qualifying artwork, then 50 years from the end of the calendar year that the last surviving artist dies). This is the same duration as Copyright under the Copyright Act 1994, which would imply that the ARR is linked to the duration of Copyright however nothing in the legislation confirms this.

  • Would the term to receive a resale royalty for a UK or Australian artist’s work that is a qualifying resale in New Zealand due to our reciprocal agreements be New Zealand’s term of 50 years, or their longer term of 70 years?  

    We are applying New Zealand’s legislation but it’s our understanding that this will change in the next few years when the NZ Copyright Act is reviewed. 

  • Has there been any consideration regarding the extension of copyright duration that will be enacted sometime in the next four years? 

    Currently the artist resale royalty will apply for 50 years after the death of the artist which aligns with New Zealand’s current Copyright Act. However our understanding is that the Copyright term will be extended prior 1 May 2028, and we would expect that the ARR term will then also be extended to align with the Copyright Act. 

  • What is IRD tax advice for successors?

    When an artist dies, the resale payment goes directly to the beneficiaries under their will, or to their estate. In these situations, the resale payment is not taxable income. The artist’s beneficiaries or estate will not need to pay income tax on the resale payment.

    The artist’s estate or beneficiaries can decide to transfer the rights to future resale payments to a third party. However, the tax outcomes may be complex. We recommend that you ask a tax professional for advice.

    Read the full IRD article ‘Resale payments for artists’ here.

  • What is the process for claiming an unpaid resale royalty?

    RRA will periodically inspect and audit published auction sale results to monitor compliance with the Act and Regulations.  However, because we rely on art market professionals and other stakeholders in the Scheme to notify us of resale payments that are due on qualifying resales, we may occasionally not be aware of a qualifying resale.

    A Right Holder who believes that a qualifying resale has taken place is encouraged to notify us through the “Contact Us” form available on our website. 

    Right Holders have 6 years from the date of the qualifying resale to notify us of any claim from the date of the resale.  After that period expires, we will have no liability to the Right Holder to collect or pay the resale royalty.

    If a Right Holder wishes to notify us of a resale royalty they think they are owed, they must provide us with:

    • Evidence that the person is the Right Holder
    • Evidence that the relevant resale is a qualifying resale
    • The names of the persons liable under section 17 of the Act to pay the resale royalty, if known.

    On receipt of such a notice from a Right Holder, we will use reasonable efforts to verify the claim.  If the claim is verified and we have not already processed the relevant resale royalty payment, we will notify the persons who are liable to pay the resale royalty of their obligations under the Scheme and follow our process set out above for collecting and distributing the resale royalty payment.  We will then have no further obligation to the Right Holder until we receive the resale royalty payment.  While we will use reasonable efforts to resolve claims, we cannot guarantee any particular outcome.

Buyers and Sellers

  • Has there been any consideration regarding the extension of copyright duration that will be enacted sometime in the next four years? 

    Currently the artist resale royalty will apply for 50 years after the death of the artist which aligns with New Zealand’s current Copyright Act. However our understanding is that the Copyright term will be extended prior 1 May 2028, and we would expect that the ARR term will then also be extended to align with the Copyright Act. 

  • How are voluntary qualifying resales enforced?

     A “Voluntary Qualifying Resale” means that all parties to the resale agree in writing that the resale is a qualifying resale for purposes of the Act; and what % of the resale value they agree will be payable to the artist as a resale royalty; and who will provide the relevant information to the Collection Agency.    

     If these conditions are met, and reported to RRA, then RRA will treat the voluntary qualifying resale like any other for the purposes of the Act, including in regard to enforcement.

  • How do you define ‘limited number of copies”? 

    The Act does not define what a limited number of copies is, although there is provision in the Copyright Act that a 3 Dimensional artwork that has fewer than 50 copies produced is copyright protectable, so this might be a useful benchmark. We suggest using good faith best efforts to do your due diligence in researching, and keep a record of your research in case it is needed at a future date.  If you have any concerns or want to discuss then please just get in touch with us. 

  • How does it work when an art consultant facilitates a resale between two private parties?

    The resale is considered a professional resale because an art market professional is involved.  That means, provided it meets the standard criteria, it will be a qualifying resale.
     

  • When is a resale royalty payable?

    An “eligible artist” (or their successor) has a right to be paid a resale royalty each time there is a “qualifying resale” of an “original visual artwork” by that artist (provided the resale right had not “expired” at the time of resale)

     Use the flowchart in the Criteria section of the Homepage to apply this test in 4 Steps.

  • Who calculates resale value in a “voluntary qualifying resale”?

    Section 9(3) of the Act states that in order for a resale to be a “voluntary qualifying resale” all the parties to the resale agree in writing that the resale is a voluntary qualifying resale, and what percentage of the resale value will be payable as the ARR, which in effect means both the buyer and the seller. (In addition to agreeing on the value of the resale royalty both the buyer and the seller will also need to determine who is responsible for notifying and paying RRA the royalty amount.) See Checklist 1 for more details.

  • Who is liable to pay the resale royalty?

    The following persons are jointly and severally liable to pay the 5% resale royalty to RRA (section 17, of the Act) :

    • The seller, and either
      • the agent acting for the seller on the resale (usually the AMP); or
      • if the seller does not have an agent, the agent acting for the buyer on the resale; or
      • if there are no agents, the buyer.

  • Would the term to receive a resale royalty for a UK or Australian artist’s work that is a qualifying resale in New Zealand due to our reciprocal agreements be New Zealand’s term of 50 years, or their longer term of 70 years?  

    We are applying New Zealand’s legislation but it’s our understanding that this will change in the next few years when the NZ Copyright Act is reviewed. 

Publicly funded Galleries, Libraries, Archives and Museums (GLAM)

  • RRA policy on non-compliance

    (sections 26 & 27, the Act) 

    If a liable person fails to pay a resale royalty, or fails to provide the required reporting information, or if any other requirement of the Act is not complied with, then the Act provides that the Collection Agency may apply to a court for orders enforcing these obligations, and for any other order that is appropriate for an infringement of a property right.  The Act provides that this does not limit any other proceeding that may otherwise be taken by the Collection Agency, a right holder, or any other person affected.  Nor does it limit any other power of the court.  

  • How does the scheme apply to GLAM organisations?

    This section applies to:

    • publicly funded art galleries; and
    • publicly funded museums, libraries, and archives that collect and display artworks (“GLAM”). 

    Three ways the Scheme affects GLAM:

    1. GLAM are not Art Market Professionals (AMPs). 
    2. However, resales involving GLAM do fall within the Scheme.  If any GLAM is involved in a resale of original visual artwork it may still count as a “professional resale”  (and therefore a “qualifying resale”).  (See Step 1 of the Criteria to learn what a qualifying resale is). 
    3. GLAM don’t have liability for paying the royalty.  Generally, GLAM aren’t required to report to RRA on qualifying resales either, UNLESS there are no Art Market Professionals involved in the resale.  In that event, then each GLAM  will be responsible for reporting information about the resale to RRA.

  • But aren’t Universities publicly funded?

    Just because a University receives some public funding for its operations, does not make it a “publicly funded art gallery” or “a publicly funded archive that collects and displays artworks”.   Universities receive funds and revenue from many sources.  Any artworks the University has collected and displayed may have been purchased other than with public funds (e.g. through University operating revenue, sales of assets, or private bequeathments or foundations).  The proportion of public funding it does receive is likely to be ear-marked and attached to tuition, rather than for the purpose of operating an art gallery or archive to collect and display artworks.   

    Universities may establish special bodies to collect and display artwork.  But unless that special body is in effect operating as an art gallery or archive (etc) that collects and displays artworks, and its operation is publicly funded (e.g. it applies for and receives public funding for that purpose) then resales involving that body are unlikely to automatically qualify as a professional resale (unless an AMP or GLAM is involved in the resale).   

  • What is the duration of the resale right period and will this change with the Copyright Act review?

    Section 15 of the Act states that the duration of the ARR right is 50 years from the end of the calendar year that the (eligible) artist dies, (or if 2 or more artists create the qualifying artwork, then 50 years from the end of the calendar year that the last surviving artist dies). This is the same duration as Copyright under the Copyright Act 1994, which would imply that the ARR is linked to the duration of Copyright however nothing in the legislation confirms this.

  • What are the requirements to report all secondary purchases to RRA, or only those that are a Qualifying Resale under the Act?

    You are only required to report a Qualifying resale as defined in the Act. The scheme will operate on good faith and the belief that you are better qualified to determine whether a purchased item is a qualifying resale or not, and we will not be investigating your decisions unless independently alerted

  • In the RRA guidelines, it states RRA will ‘verify’ GLAM’s reports. What does this involve?  

    RRA will review resales reports for detail and completeness, as defined by the Act and Regulations. The objective of verifying reports is to have complete and accurate information to support rights holder identification and distribution processes, ensuring timely payment to the artist(s) or successors(s).

  • When a GLAM that operates a gift shop makes a sale of an original visual artworks that has been purchased directly from the artist, is this regarded as qualifying resale?

    If the GLAM gift shop has actually purchased the original visual artworks from the artist, this is the initial sale, and when the GLAM gift shop sells the item to their customer this is a resale which will be regarded as a qualifying resale, assuming the other criteria are met. 

    If however, the artist has instead consigned the original visual artworks to the GLAM gift shop to sell on their behalf, then there has not yet been any sale or transfer of ownership as ownership remains with the artist, in which case when the GLAM gift shop sells the original visual artwork to their customer it will be the first sale rather than a qualifying resale and no reporting or royalty will be required. 

  • Are GLAM gift shops acting as AMPs when selling original visual artworks to their customers  when the first sale is between the artist and the GLAM gift shop?   

    In this case yes, as the GLAM gift shop can be regarded as “any other person who is in the business of dealing in visual artworks”, they will fit the definition of an AMP under the act.  In any event, the obligations will be the same whether they are regarded as a GLAM member or an AMP, as the responsibility will be on them to report and pay the relevant royalty if required. 

  • What do we do when we are unable to determine the Artist or maker of an item? Do we need to report a resale when we are unsure as to whether it is a qualifying resale? 

    We suggest using good faith best efforts to do your due diligence, which is probably exactly what you will have done anyway as part of your research into identifying each item you purchase.  We recommend you keep written records of your due diligence in case it is needed in the future, but we will not be auditing your decisions unless independently requested to do so.  If you have any doubts please contact us and we will be happy to help you.  

  • We often buy acquisitions as lots and within those lots there might be qualifying items, for example, a sketch valued over $2000. How should we declare a select item?

    We suggest using good faith best efforts to do your due diligence, which is probably exactly what you will have done anyway as part of your research into identifying each item you purchase.  We recommend you keep written records of your due diligence in case it is needed in the future, but we will not be auditing your decisions unless independently requested to do so.

    Report the individual item not the lot and include the details as you can – i.e. the artist’s name and details of the sketch, the seller of the lot, and the date of the acquisition.  And again, if in doubt please contact us.

  • Our valuation process to determine a fair purchase price is often based on the value of an archive as a whole and most items within the archive won’t qualify for the royalty. What are the expectations of RRA with regard to these items?

    If the value of each individual item is below the threshold of NZ$2000, then the sale of that individual item will not meet the threshold of a qualifying resale, and no reporting or payment of a resale royalty will be required.

    If however you later determine through your ongoing research that one of the items you purchased was in fact an original visual artwork that has a value higher than $2000 and which was reflected in the overall archive price, you may have an obligation to report the resale to RRA.  Again in this situation , if you have any question as to whether you have any obligations under the Act, please contact us and we will help determine the appropriate action to take. 

  • Is there any process we should follow to determine whether a sufficiently “limited number of copies” of a item exist to determine whether the work is an original visual artwork or not?

    If copies are not numbered as with a limited edition print, and there is no other information available to help ascertain how many copies have been made, then you can possibly assume it is not a sufficiently limited number and therefore not a qualifying resale.  The Act does not define what a limited number of copies is, although there is provision in the Copyright Act that a 3 Dimensional artwork that has fewer than 50 copies produced is copyright protectable, so this might be a useful benchmark. We suggest using good faith best efforts to do your due diligence in researching, and keep a record of your research in case it is needed at a future date.  If you have any concerns or want to discuss then please just get in touch with us. 

  • How do you define ‘limited number of copies”? 

    The Act does not define what a limited number of copies is, although there is provision in the Copyright Act that a 3 Dimensional artwork that has fewer than 50 copies produced is copyright protectable, so this might be a useful benchmark. We suggest using good faith best efforts to do your due diligence in researching, and keep a record of your research in case it is needed at a future date.  If you have any concerns or want to discuss then please just get in touch with us. 

  • What doesn’t count as visual art? Clothing? Or does haute couture count as visual art? 

    Section 8 of the Act defines what is a visual artwork, and does not refer to clothing – although it does refer to drawings and textiles, so while the clothing items themselves may not be regarded as an original visual artwork,  the underlying drawings that they are based may be regarded as an original visual artwork, and the same with the textile designs.  Arguably if the clothing item is at the level of a WOW entry, it might be regarded as sculpture and therefore would be included in the definition of an original visual artwork. 

  • Should a GLAM purchase an item of jewellery in 2023 attributed to an artist from Palmerston North who died in 1959. Is it correct that this doesn’t qualify for the royalty as the known maker died more than 50 years ago? 

    Correct this is no longer a qualifying resale (assuming it would otherwise have been), as the right to a resale royalty for this Artist expired fifty years from the end of the year that they died, ie at the end of 2009.  

  • Would the term to receive a resale royalty for a UK or Australian artist’s work that is a qualifying resale in New Zealand due to our reciprocal agreements be New Zealand’s term of 50 years, or their longer term of 70 years?  

    We are applying New Zealand’s legislation but it’s our understanding that this will change in the next few years when the NZ Copyright Act is reviewed. 

  • Has there been any consideration regarding the extension of copyright duration that will be enacted sometime in the next four years? 

    Currently the artist resale royalty will apply for 50 years after the death of the artist which aligns with New Zealand’s current Copyright Act. However our understanding is that the Copyright term will be extended prior 1 May 2028, and we would expect that the ARR term will then also be extended to align with the Copyright Act. 

Educational Institutions and other organisations

  • How does an educational institution sit with respect to the Scheme?  Are their resales “professional resales”?  

    Section 9(2)) mentions publicly funded libraries, museums, and archives that collect and display artworks (GLAM), but not universities, who have extensive collections.

    To be a “professional resale”, at least one person involved in the resale must be:

    • an Art Market Professional or
    • a publicly funded art gallery; or
    • a public funded museum, library, or archive that collects and displays artwork. 

    (from section 9(2)(a)(i) to (iii)).

    Universities and other educational institutions are clearly not listed in this definition, which means their sales and purchases of artwork won’t automatically be classified as a “professional resale”. 

    However, their sales and purchases will still qualify as a professional resale if at least“1 person involved in the resale” satisfies (a), (b), or (c) above.  Examples include (but aren’t limited to): 

    • the University is buying from an Art Market Professional;
    • the University is buying from a publicly funded archive that collects and displays artworks (or other GLAM);
    • the University is selling and using an auctioneer to assist with the resale;
    • the University is selling, and has engaged an art consultant to assist with a private resale;
    • the University is selling to a private buyer, who is using an Art Market Professional or an art consultant to assist them with the resale; 

  • But aren’t Universities publicly funded?

    Just because a University receives some public funding for its operations, does not make it a “publicly funded art gallery” or “a publicly funded archive that collects and displays artworks”.   Universities receive funds and revenue from many sources.  Any artworks the University has collected and displayed may have been purchased other than with public funds (e.g. through University operating revenue, sales of assets, or private bequeathments or foundations).  The proportion of public funding it does receive is likely to be ear-marked and attached to tuition, rather than for the purpose of operating an art gallery or archive to collect and display artworks.   

    Universities may establish special bodies to collect and display artwork.  But unless that special body is in effect operating as an art gallery or archive (etc) that collects and displays artworks, and its operation is publicly funded (e.g. it applies for and receives public funding for that purpose) then resales involving that body are unlikely to automatically qualify as a professional resale (unless an AMP or GLAM is involved in the resale).   

  • How do you define ‘limited number of copies”? 

    The Act does not define what a limited number of copies is, although there is provision in the Copyright Act that a 3 Dimensional artwork that has fewer than 50 copies produced is copyright protectable, so this might be a useful benchmark. We suggest using good faith best efforts to do your due diligence in researching, and keep a record of your research in case it is needed at a future date.  If you have any concerns or want to discuss then please just get in touch with us. 

General

  • Can the Auction House put a fee on top of the sale to cover that 5%? Is it on the hammer price? 

    The resale royalty payable is calculated at 5% of the “resale value” of the qualifying resale (section 16).

    Section 10 says that “resale value” means: “the value of the consideration given for the visual artwork under the contract for resale”. 

    This may include:

    • the amount paid in New Zealand dollars;  
    • the value of goods and/or services paid in kind;  
    • (if paid in another currency), the amount converted to NZD at the date of payment.   

    It does not include:

    • goods and services tax (GST; or
    • duties, levies, or taxes (etc) under the Customs and Excise Act 2018; or
    • “any costs associated with the resale, for example, a commission or a buyer’s premium” 

    So, the Auction House / Art Market Professional’s fees would be a cost or premium or commission associated with the resale, and are therefore excluded from the calculation of “resale value” or the royalty. 

    Auction Houses and other Art Market Professional’s must be cognisant of other rules in the Act that prohibit waiving, charging, repaying or sharing the royalty: 

    • An artist cannot ‘alienate’ their royalty right during their lifetime (s 13).  This means an artist cannot lose, sell, license, assign, charge, or waive their resale right during their lifetime, and any agreement to do so is void (s 13(2)). 
    • Any agreement to repay the resale royalty is void (s 17(5)), as is any agreement to share the royalty (except where the Act provides that a royalty can be held in shares e.g. where there are joint artists (s 12), or multiple successors (s 14(4)). 

  • How do you define ‘limited number of copies”? 

    The Act does not define what a limited number of copies is, although there is provision in the Copyright Act that a 3 Dimensional artwork that has fewer than 50 copies produced is copyright protectable, so this might be a useful benchmark. We suggest using good faith best efforts to do your due diligence in researching, and keep a record of your research in case it is needed at a future date.  If you have any concerns or want to discuss then please just get in touch with us. 

  • What is the process for claiming an unpaid resale royalty?

    RRA will periodically inspect and audit published auction sale results to monitor compliance with the Act and Regulations.  However, because we rely on art market professionals and other stakeholders in the Scheme to notify us of resale payments that are due on qualifying resales, we may occasionally not be aware of a qualifying resale.

    A Right Holder who believes that a qualifying resale has taken place is encouraged to notify us through the “Contact Us” form available on our website. 

    Right Holders have 6 years from the date of the qualifying resale to notify us of any claim from the date of the resale.  After that period expires, we will have no liability to the Right Holder to collect or pay the resale royalty.

    If a Right Holder wishes to notify us of a resale royalty they think they are owed, they must provide us with:

    • Evidence that the person is the Right Holder
    • Evidence that the relevant resale is a qualifying resale
    • The names of the persons liable under section 17 of the Act to pay the resale royalty, if known.

    On receipt of such a notice from a Right Holder, we will use reasonable efforts to verify the claim.  If the claim is verified and we have not already processed the relevant resale royalty payment, we will notify the persons who are liable to pay the resale royalty of their obligations under the Scheme and follow our process set out above for collecting and distributing the resale royalty payment.  We will then have no further obligation to the Right Holder until we receive the resale royalty payment.  While we will use reasonable efforts to resolve claims, we cannot guarantee any particular outcome.