The Artist's Resale Right: Rates, Caps and Effects

What the right is, stated in the terms of the instrument

Directive 2001/84/EC of the European Parliament and of the Council of 27 September 2001 requires member states to provide authors of original works of art with an inalienable right, which cannot be waived even in advance, to receive a royalty based on the sale price obtained for any resale. The right applies to all acts of resale involving art market professionals as sellers, buyers or intermediaries. It does not apply to sales between private individuals with no professional involved, nor, where a member state so provides, to sales by an individual to a public museum.

The term follows copyright, so seventy years from the death of the author, and the right passes to those entitled after death. Member states had to transpose by 1 January 2006. Those that had not previously applied a resale right were allowed to defer application to the works of deceased artists until 1 January 2010, with a possible two-year extension. The Directive applies to works that on 1 January 2006 were still protected under member state copyright law.

Two features of that construction do most of the practical work. The right is inalienable and cannot be contracted away, which means it cannot be negotiated out of a consignment agreement or a sale contract. And its trigger is the presence of an art market professional, which means the identical work sold twice on the same day, once through a dealer and once between two private collectors, generates a royalty in the first case and none in the second.

The arithmetic, and the precise point at which the cap bites

The Directive sets a descending scale: 4 per cent of the portion of the sale price up to 50,000; 3 per cent from 50,000.01 to 200,000; 1 per cent from 200,000.01 to 350,000; 0.5 per cent from 350,000.01 to 500,000; and 0.25 per cent on the portion above 500,000. Member states may apply 5 per cent to the lowest band. The total royalty on any single sale may not exceed 12,500. Member states may set a minimum sale price below which the right does not apply, which may not exceed 3,000, or 10,000 where the seller acquired the work directly from the artist less than three years before the resale.

Work the scale through and the structure becomes concrete. The cumulative royalty at a sale price of 500,000 is 8,750: 2,000 on the first band, 4,500 on the second, 1,500 on the third, 750 on the fourth. The remaining 3,750 of the 12,500 cap accrues at 0.25 per cent, which takes a further 1,500,000. The cap therefore binds at a sale price of exactly 2,000,000, and above that figure the royalty is a fixed 12,500 whatever the price.

The effective rate collapses accordingly. At 1,000,000 the royalty is 10,000, or 1 per cent. At 2,000,000 it is 12,500, or 0.625 per cent. At 10,000,000 it is still 12,500, or 0.125 per cent. Against the hammer price of $205,000,000 achieved by the Klimt at Sotheby's New York in November 2025 the equivalent charge, had the right applied at all, would have been six thousandths of one per cent. The right is a material cost in the middle of the market and a rounding error at the top, and any argument about its effect on where trophy works are sold has to start from that number.

The base is the hammer price, not the premium-inclusive total. Christie's states that the royalty applies where the hammer price exceeds the national threshold, works the calculation on the hammer price, and converts using the European Central Bank rate on the day of the sale, which makes any figure quoted in another currency a derived and date-dependent number.

Who is liable in law, and who actually pays

The Directive says the royalty is payable by the seller, while allowing member states to provide that another art market professional shall be liable alone or jointly. The salerooms have used that latitude. Christie's conditions state that where the laws apply to a lot, identified with a lambda symbol in the sale particulars, the buyer must pay an extra amount equal to the royalty unless the law requires the payment to be made by the seller, and that the house will pay the royalty to the appropriate authority on the buyer's or the seller's behalf. Sotheby's defines the Purchase Price for auction lots as the hammer price plus buyer's premium, plus overhead premium where applicable, plus taxes, plus any applicable artist's resale right royalty payable by the buyer on a qualifying lot.

The economic incidence, in other words, commonly lands on the buyer even though the statutory liability sits with the seller. And it lands outside the estimate. Christie's states plainly that estimates do not include buyer's premium or any applicable taxes, charges or artist's resale royalty. A bidder modelling a total commitment from a printed estimate is modelling the smallest of the several numbers involved.

National thresholds vary within the ceiling the Directive sets, and they are not trivial differences. Christie's own schedule gives 1,000 for lots located in the United Kingdom at the time of sale, 3,000 for the Netherlands and 750 for France. The United Kingdom moved its thresholds and bands from euro to sterling under the Design Right, Artist's Resale Right and Copyright (Amendment) Regulations 2023, with the change not applying to any sale where the contract date preceded 1 April 2024. The UK bands are now 4 per cent to GBP 50,000, 3 per cent to GBP 200,000, 1 per cent to GBP 350,000, 0.5 per cent to GBP 500,000 and 0.25 per cent above, with a total royalty cap of GBP 12,500 and a threshold of GBP 1,000, or GBP 10,000 where the seller bought directly from the artist within the preceding three years.

Where the right does not exist, and what that means for venue

The United States has no federal resale right. California enacted one in 1976, effective 1 January 1977, granting artists 5 per cent of the proceeds on resales of their work where the sale took place in California or the seller was a California resident. In Close v. Sotheby's, Inc., decided by the Ninth Circuit on 6 July 2018, the court held the statute preempted by the Copyright Act of 1976 for all sales after that Act's effective date of 1 January 1978, leaving the California right operative only for the single year 1977. Federal bills, including the ART Act, have not passed. Switzerland and Hong Kong likewise impose no resale royalty.

The venue arithmetic that follows is easy to state and easy to overstate. A work by a living artist sold in London or Paris carries a royalty capped at 12,500. The same work sold in New York, Geneva or Hong Kong carries none. On a work hammered at 2,000,000 or above, moving the sale out of the EU or the UK saves the full cap. Against a buyer's premium that on the same hammer runs to hundreds of thousands, against shipping, insurance, customs and the difference in bidder depth between one saleroom and another, 12,500 is not the number that decides where a major picture is consigned.

Below the top, the calculation is different in kind. At the UK threshold of GBP 1,000 the royalty is GBP 40. The European Commission estimated the cost of administering the right at up to 50 per transaction. At the bottom of the scale the administrative burden can exceed the royalty it collects, which is a real objection to the design of the threshold and a different objection entirely from the claim that the right drives trade offshore.

The measured effect on where works are sold

The European Commission examined exactly that claim in its report on the implementation and effect of the Resale Right Directive, COM(2011) 878 final, of 14 December 2011, covering 2005 to 2010. Its conclusion was negative in both directions. No clear patterns could be established linking the loss of the EU share in the global market for modern and contemporary art with the harmonisation of the resale right on 1 January 2006. Nor could clear patterns be established indicating systematic trade diversion within the EU away from those member states that introduced the right for living artists in 2006.

The movement the data did show was elsewhere. Over the period examined, China's share of the global market rose from around 5 per cent in 2006 to 23 per cent in 2010, while the EU and the United States both lost ground. A period in which the largest single shift in global market share was the emergence of a market with no resale right, and in which no diversion pattern attributable to the right could be isolated, is a period in which the right was not the operative variable.

That finding should be held with appropriate limits. It is an absence of demonstrated effect over one six-year window, not a proof that the right is costless, and the Commission was careful about the distinction. The subsequent trade evidence has not disturbed it. London, which levies the royalty, took $10.5bn or 18 per cent of global value in 2025 by the Art Basel and UBS estimates, and ArtTactic figures reported in July 2026 put London auction sales at $1.42bn for the first half of 2026, up 131 per cent year on year. A market operating under the right for two decades has not been hollowed out by it.