A month into the imposition of an additional “resale royalty” on the sale of art in England, British dealers and auctioneers are finding ways to pay or charge the extra fee on sales of artworks by living artists that are sold a second or subsequent time.
NEW YORK—A month into the imposition of an additional “resale royalty” on the sale of art in England, British dealers and auctioneers are finding ways to pay or charge the extra fee on sales of artworks by living artists that are sold a second or subsequent time.
Both Christie’s and Sotheby’s have begun to assess auction buyers the amounts of the fees, which are set on a sliding scale based on the sale price of the artwork. Under the new system, works up to €50,000 are assessed 4 percent; from €50,000/200,000, 3 percent; from €200,000/350,000, 1 percent; from €350,000/500,000, half of 1 percent; and objects in excess of €500,000, one-fourth of 1 percent. The maximum amount of resale royalties payable, however, is €12,500, or $14,904.
Members of the art trade have complained for years that assessing an additional payment for the sale of art on the secondary market would drive collectors to sell their work to buyers in Switzerland or the United States, where there are no such national resale royalties.
Christie’s and Sotheby’s offer a consignor the option of selling a work elsewhere. “We can alleviate some concerns by offering another jurisdiction,” says Matthew Weigman, spokesman for Sotheby’s in New York.
The law now applies only to the resale of artworks by living artists, but in 2009 it will be extended to cover works by deceased artists.
The British resale royalties law went into effect on Feb 14, placing England in compliance with other members of the European Union. Resale royalties or “droit de suite” were first implemented in France in the 1920s.
Artists have had mixed reactions to the tax law. British artist Damien Hirst has publicly expressed his support for it, while sculptor Anthony Caro and painter David Hockney are members of a group of artists who oppose the measure.
In an e-mail Caro told ARTnewsletter he is “concerned that the scheme would be terribly complicated to administer and just create more bureaucracy. It will mainly benefit artists who are already successful.” Furthermore, says Caro, “when the artist sells a work, he or she gets a payment that is reasonable at the time. The value may go down as well as up; this is the risk the buyer takes.”