Resale Right for Visual Artists Act 2023

The Resale Right for Visual Artists Act 2023 creates a right for eligible artists, and in some cases their successors, to receive a royalty when an original visual artwork is resold in a qualifying transaction.

For most businesses, this is a secondary-market rule. It is not about the first sale of the artwork. It is also separate from copyright ownership, so a resale royalty can still arise even if the artist was not the first owner of copyright in the work.

If your business helps sell artworks on resale, the Act is mainly about process. You may need to identify qualifying sales, work out whether a royalty is payable, calculate the resale value correctly, pay the royalty to the collection agency and provide transaction information.

The Act also says the system should be administered in a way that acknowledges and respects the role of Māori as tangata whenua, provides culturally appropriate support to Māori artists, and is inclusive of the different needs of all peoples in New Zealand.

The Act applies to eligible artists and, after death, some successive right holders. Eligibility can depend on New Zealand citizenship, residence or domicile, or a connection to a reciprocating country.

That matters because a business cannot assume the royalty only applies to living New Zealand artists. A resale may still trigger the regime where the artist has died and the right is now held by a successor who meets the Act’s requirements at the relevant time.

The definition of visual artwork is broad. It includes cultural expressions of Māori, cultural expressions of Pacific peoples, paintings, drawings, carvings, prints, sculpture, collage, modelling, craftwork, ceramics, glassware, jewellery, textiles, weaving, metalware, furniture, photography, video art, multimedia art and art created using computers or other electronic devices.

The Act excludes buildings, dramatic works, musical works, and most literary works unless they are compilations that include a qualifying visual work. So a business should not assume the regime is limited to framed paintings sold through a gallery. It can reach a much wider range of objects and media that are traded as visual art.

Not every resale is covered. A resale must be a qualifying resale before the royalty rules apply.

There are two main pathways. The first is a professional resale. This requires at least one person involved in the resale to be an art market professional acting in that capacity, or a publicly funded art gallery, or a publicly funded museum, library or archive that collects and displays artworks.

The resale must also have a New Zealand connection. In broad terms, the relevant participant must be resident, incorporated, registered or carrying on business in New Zealand, and the resale must relate to that part of the participant’s dealings in visual artworks that occur at least partly within New Zealand.

The second pathway is a voluntary qualifying resale. If a resale does not otherwise qualify, the parties can still choose to bring it into the regime by written agreement. That agreement must say the resale is a qualifying resale, record the royalty percentage, and identify which party will provide information to the collection agency.

In either case, the resale value must meet the threshold set by regulations. The Act says that threshold must sit somewhere between $500 and $5,000.

The Act defines art market professional broadly. It includes an auctioneer, an art dealer, an art consultant, the owner or operator of an art gallery that deals in visual artworks, and any other person who is in the business of dealing in visual artworks.

That broad wording matters for small businesses. A business may be caught even if it does not describe itself as a gallery or auction house. If you regularly broker, source, place, market or sell artworks as part of trade, you should not assume the Act sits outside your operations.

For example, a dealer arranging a resale between collector and buyer, a consultant managing a sale for a client, or a gallery operator handling a secondary-market consignment may all need to think about the regime. The key question is not your branding. It is whether you are in the business of dealing in visual artworks and are involved in the resale.

This is a good reason to map where artwork resales happen in your business. The legal issue may arise in consignment sales, private brokered sales, online listings, estate sales, or mixed transactions where artworks are sold alongside other items.

For a professional resale, the royalty is 5% of the resale value. For a voluntary qualifying resale, the royalty is the percentage agreed by the parties in writing.

Resale value means the value of the consideration given under the resale contract. It can include New Zealand dollar payments, foreign currency converted to New Zealand dollars at the Reserve Bank reference rate as at the date of payment, and goods or services paid in kind.

The Act also says what is left out. Resale value does not include GST, customs-related duties, taxes, fees, charges or levies on goods, or costs associated with the resale such as commission or a buyer’s premium.

That means businesses should be careful not to calculate the royalty on the wrong figure. A settlement statement may show several amounts moving between parties, but the royalty calculation does not simply follow every line item on the invoice. You need to separate the value given for the artwork itself from excluded amounts such as GST and resale costs.

Where a sale includes non-cash consideration, the business should also keep a clear record of how that value was assessed.

The people liable to pay the royalty are set by the Act. Liability is joint and several. That means more than one person can be legally responsible for the same royalty amount.

The seller is always one of the liable parties. The other liable party depends on the structure of the resale. If the seller has an agent on the resale, that agent is also liable. If the seller does not have an agent, the buyer’s agent is liable. If there are no agents, the buyer is liable.

Liability arises on completion of the qualifying resale. It is discharged when the total amount of the royalty is paid to the collection agency.

For businesses, this makes agency roles important. If your business acts for the seller, you should assume the royalty risk may sit directly with you as well as the seller. If your business acts for the buyer and there is no seller’s agent, the same issue can arise. Internal files and sale documents should clearly record who acted for whom, because that affects who is on the hook for payment.

The Act does more than require payment. It also requires certain people involved in a qualifying resale to ensure information is provided to the collection agency.

For professional resales, that can include each art market professional involved. If no art market professional is involved, the duty can fall on each relevant publicly funded gallery, museum, library or archive involved in the resale. For a voluntary qualifying resale, the responsible person is the one named in the parties’ written agreement.

The required information includes the artwork name if known, a brief description, the resale value, the artist’s name if known, and the name and contact details of the people liable to pay the royalty if known. Regulations may add more information and set the time frame and method for reporting.

In practice, this means businesses should build a repeatable file for each qualifying sale. If staff have to reconstruct the transaction later from emails, invoices and memory, reporting errors become much more likely. A standard resale checklist can make the process much easier and reduce disputes about missing information.

The resale right is personal in an important way. While it is held by the artist, it cannot be waived, assigned or charged, and any attempt to do so is void.

For businesses, the practical point is simple: be careful with standard contract wording. A broad clause saying the artist gives up all future claims, royalties or similar rights may not work if it tries to waive this resale right while the artist holds it.

The Act does allow a right holder to decline payment of all or part of a royalty, or future royalties for some artworks, but only through the process set by regulations. That is different from a business trying to contract out of the regime in advance.

Where an artwork was created jointly, the right is held only by those joint artists who are eligible at the relevant time, in equal shares unless a signed written agreement says otherwise. After an artist’s death, the right can pass to successors and may continue for 50 years after the end of the calendar year in which the artist dies, or for joint works, 50 years after the end of the calendar year in which the last joint artist dies.

The Act includes transitional rules that matter for timing. A resale is not a qualifying resale if the contract for the resale was entered into before the commencement date, even if one or more terms are satisfied on or after commencement.

That means businesses should focus on when the resale contract was entered into, not just when payment, delivery or settlement happened. If your business handles long-running consignments or staged transactions, this timing point can be important.

The schedule also deals with artists who died before commencement. In that situation, the Act sets a special rule for identifying who holds the resale rights on commencement by working from who would have been beneficially entitled if the property right had existed earlier and intestacy assumptions applied.

For most businesses, the main operational lesson is to keep clear contract dates and file notes. If a sale sits around the commencement period, you may need to show exactly when the resale contract was made and whether the Act applies at all.

The collection agency has a central role under the Act. It must be appointed by the Minister and is responsible for collecting and distributing resale royalties to right holders.

The collection agency must operate in a way that is transparent, accountable and respectful, act in the best interests of right holders, and acknowledge and respect the role of Māori as tangata whenua while being inclusive of the different needs of all peoples in New Zealand. Regulations may also set detailed operating rules, including how royalties are collected, held and distributed, how undistributed amounts are managed, what records must be kept, and whether a register of right holders is maintained.

For businesses, the practical point is that payment and reporting are not made directly to the artist under the core liability rule. The Act channels the process through the collection agency. Once an agency is appointed and regulations are in place, businesses should align their internal procedures with that system rather than improvising case by case.

The Act gives the collection agency enforcement options. It may apply to a court if required information is not provided, if royalty payments are not made, or if another requirement under the Act is not complied with.

The court may order that information be provided, order payment of royalties owing, and make orders appropriate for an infringement of a property right. The Act also says these enforcement provisions do not limit other proceedings that may otherwise be taken by the collection agency, a right holder or another person.

For a small or medium business, the safest approach is to treat this as a workflow issue rather than a one-off legal issue. Review whether your business falls within the art market professional definition, identify where secondary sales happen in your business, and update your sale documents and internal checklists. Because regulations are needed for several operational details, assign someone to monitor commencement, threshold settings, payment timing, reporting timing and collection agency announcements.