For certain Aotearoa New Zealand artists, 1 December 2024 marked an auspicious day – the beginning of the Artist Resale Royalty Scheme (the ARR). From now on, royalties will be collected on the (qualifying) resales of eligible artworks in the secondary market and distributed to artists and their successors.

The ARR has been highly anticipated by artists since the enactment of the Resale Right for Visual Artists Act 2023. The national scheme is designed to help address a disparity between the cultural value contributed by visual artists and the monetary compensation those artists might receive.

As visual artworks are a commodity that generally increase in value over time, many of Aotearoa’s most beloved artists (and their successors) have been missing out on substantial sums from the on-sale of their works in the secondary market – until now.

Since our last update on the ARR, the Resale Right for Visual Artists Regulations 2024 have come into force to make the resale royalty a practical reality.

A quick recap on the ARR

• The ARR provides a framework for visual artists to continue to receive royalties when their work is sold in the secondary market. This is a similar concept to musical artists receiving royalties when their songs are replayed.

• There is flat rate royalty of 5% of the resale value (before any additions, deductions or charges).

• The resale right automatically applies to all “professional resales” i.e., sales involving art market professionals (e.g., art galleries, dealers, consultants and auctioneers), or sales by publicly funded museums, galleries, libraries and archives.

• Parties to private resales can opt in to “voluntary qualifying resales”.

• The resale right has the same lifespan as copyright (50 years after the death of the artist) and is inalienable.

• The resale right will be provided on a reciprocal basis with corresponding regimes overseas.

What’s new?

Copyright Licensing New Zealand (CLNZ) has been appointed as the collection agency for the scheme by the Ministry of Arts, Culture and Heritage.

CLNZ has now established an independent and not-for-profit body to manage the ARR, Resale Royalties Aotearoa Toi Huarau (RRA). Toi Huarau means “art of many benefits, for many people”, in recognition of the benefits that may be shared between visual artists, their descendants and their communities through the ARR.  

RRA has established a registration process. Visual artists (and their successors), art market professionals, and publicly funded spaces such as galleries or museums, can now register their interest in the scheme. The RRA recommends registering as soon as possible, as it says it will assist the body to identify, collect and distribute royalty payments in a timely fashion. It will also help art market professionals to stay informed about their obligations under the ARR and to receive administrative support with compliance.

RRA has provided helpful guides to evaluate whether the ARR will apply to a particular resale. Interested parties will need to ask: (i) is there a “qualifying resale”… (ii) of an “original visual artwork”… (iii) by an “eligible artist”? If the answer is “yes” to all three questions, the ARR is likely to take effect. However, if the eligible artist has died, parties will also need to check whether the resale right had expired at the time of the resale.

Interested parties need to be aware the “qualifying resale” value threshold (i.e., the minimum price) has been raised to NZ$2,000 (from NZ$1,000), following public consultation on regulations for the ARR.

Importantly, the ARR will not apply retrospectively, so only resale contracts entered on or after 1 December 2024 will be eligible.

Does the ARR apply to you?

An “original visual artwork” has a broad definition. It includes “cultural expressions of Māori or Pacific peoples” and “art created using computers or other electronic devices,” alongside a number of traditional and non-traditional media. This helps propel the ARR towards its goal of promoting and valuing the variety of ongoing work by Aotearoa artists.

If you think the ARR might apply to you, and you are interested in what other ways the law could protect your visual creations, we are here to help.