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)).