Introducing resale rights for visual artists in New Zealand

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Special Counsel - Head of Trade Marks and Designs

The market for resale art in New Zealand continues to grow and expand – 2021 saw it double in worth from the previous year. 

In response to the growing market and overseas trade agreements, the New Zealand Government has introduced the Resale Right for Visual Artists Bill (the Bill), a scheme to provide artists with a 5% royalty payment for any resale of their visual artwork (the Scheme). The Scheme recognises the typically accumulative value of visual art, by providing artists with a long-term financial interest in the art they create.

What is a resale royalty?

Visual artworks such as paintings, drawings, carvings, ceramics, jewellery, sculptures, and photographs are protected by copyright law in New Zealand. However, although the worth of the artwork may increase over time, the artist generally only receives a one-off payment for their work when it is first sold. 

Purchasers and collectors have often benefited from the capital gain of a work, where an artist has been paid only a fraction of that profit. 

This differs to other mediums of art such as literature, music or film that can often provide an artist with a more consistent stream of income through licensing rights or paid performances (e.g. by selling books, CDs, DVDs, or tickets to live events). 

The resale royalty scheme aims to rebalance the market to make it fairer on visual artists by enabling them to continue to profit from their own work after they have sold or gifted the art (or copyright).

How will the Scheme work?

The Bill guarantees an eligible artist a royalty payment equal to 5% of their work’s resale price where:

  • The work is an original piece of visual art by that artist;
  • The artist is a resident or citizen of New Zealand or reciprocating country, and the resale occurs in New Zealand;
  • The resale of the art includes at least one party who is an art market professional in the business of dealing in visual artworks, a publicly funded art gallery, or a publicly funded museum whose primary purpose includes the collection and display of artworks;
  • The contract for the resale is entered into within 50 years of the artist’s death (which will extend to 70 years when the copyright term is similarly extended); and
  • The resale price of the artwork is no less than an amount set by upcoming regulations. This minimum threshold will be set within the range of NZ$500 – NZ$5,000 (excluding GST). 

The seller and art market professional are jointly responsible for paying the royalty to the artist. Interestingly, the right to the royalty is an inalienable right that the artist can not opt out of. This is in part to prevent art dealers from pressuring artists out of receiving the payment. If an artist declines the royalty, it will be placed into a cultural fund to be redistributed into the artistic community.

The Scheme will be managed by a not-for-profit agency, funded by fees taken from royalty payments.

While private art sales will not engage the Scheme, people can opt into it. Stakeholder engagement for the Bill found a strong interest in enabling parties of private resales to voluntarily opt into the scheme, as works by certain groups (such as Māori, Pacific, and female artists) are more likely to be resold privately.  

The Scheme comes off the back of entering into Free Trade Agreements with the UK and the EU, which require New Zealand to create a reciprocal scheme to ones already in place there. It is intended to apply on a reciprocal basis for other countries (such as the EU and the UK), which will enable our artists to benefit when their art is resold outside of New Zealand. 

What now?

This Bill is a big step forward for New Zealand’s visual art industry. It comes after years of lobbying and advocating for its implementation and follows in the footsteps of over 80 countries that have already implemented a similar scheme.

We hope the new legislation will encourage visual artists to continue to develop their craft and pursue a career in their work.

Submissions have just closed on the Bill, and the legislation will be enacted by December 2024.

Special thanks to Senior Associate Katy Stove and Law Clerk Christian Tucker for preparing this article. For more information, please contact a member of our Intellectual Property team.

Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.

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