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The Resale Royalty for Visual Artists Act 2009, which became law on November 26, will be wider ranging than the British equivalent when it comes into force next year – and, unlike the UK, there will be no cap to payments.

The threshold at which the levy will apply is AUS$1000, currently about £590, but, importantly, the estates of artists who have been dead for less than 70 years will qualify immediately. In Britain, they have to wait until 2012.

Artists will get five per cent of the sale price on resale.

One condition that makes the Australian version of the law more stringent is that the levy will apply to all sales following the first transfer of ownership, even if that initial transfer was not made via a sale, for example by gift.

However, the levy will only take into account transactions that take place after it comes into effect. In other words, if the previous transfer of ownership took place before the law’s introduction, the first sale after its introduction will not count as a resale.

The remainder of the regulations are broadly similar to those in the UK, and a single collection agency will be appointed by the government to administer the scheme.

Importantly, the reciprocity rule means that the levy will have to be paid on works by qualifying Australian artists such as Sidney Nolan, when they are sold in nations such as Britain, which have already adopted the Resale Right.

Art market professionals are as unlikely to welcome the new law as they have been in the UK, especially as Australian collectors already have a number of other levies to pay, such as copyright fees and capital gains tax.

The Australian Government rejected the notion of the Resale Right in May 2006, the then Attorney General Philip Ruddock saying: “It would bring little advantage to the majority of Australian artists whose work rarely reaches the secondary art market and would also adversely affect commercial galleries, art dealers, auction houses and investors.”

Instead, they announced an Aus$6m support scheme for visual artists who did not have much money, to be rolled out over four years. However, the general election of November 2007 brought the Australian Labor Party to power, opening up the possibility of a change in view.

By Ivan Macquisten