Droit de Suite (ARR)
When purchasing a lot at auction you should always be aware of any additional charges. Droit de Suite, often referred to Artists Resale Right or ARR, is one of them.
Droit de Suite entitles creators of original works of art (including paintings, engravings, sculpture and ceramics) to a royalty each time their work is resold through an auction house or art market professional. It is payable to the artist when they are alive or to their estate for a period of up to 70 years after their death (to the end of that calendar year).
The charge is on lots making over €1,000 hammer and is on a sliding scale depending on the lot value. There is a maximum charge of €12,500 for each lot, which is reached if you spend €2 million or more, at which point I guess the €12,500 isn’t going to worry you too much.
This scale is cumulative, so the charge percentage only applies to the amount within that threshold. For example, if looking at a lot that sells for €250,000 hammer, the first €50,000 would achieve 4% (€2,000), the next €150,000 would achieve 3% (€4,500), and the final €50,000 would achieve 1% (€500). The total royalties would therefore be €7,000. There is no VAT on the amount payable so in this example, you (the buyer) would pay a flat €7,000.
The table below shows the full breakdown:
(This table was taken from the gov.uk website here and is a great resource for more information on the topic)
You may have spotted that all the calculations are in euros. Because we have the glorious Great British Pound, a currency conversion is required to find out the total payable. Auction houses will check the exchange rate in the morning of the sale and use that to calculate the charge as it is a requirement of the scheme to use the exchange rate on the date the artwork is sold. This rate will be passed on to the auctioneer who will sometimes announce the basics of ARR and the exchange rate being used at the beginning of the auction.
The main collecting agency in the UK is DACS (The Design and Artists Copyright Society). The auctioneer makes no money by collecting this charge as it is passed on in full. As DACS is a collection agency it is a good resource to use if you want to look at the nitty-gritty of the legislation. You can read more here. It covers the many caveats often found in legislation like this. For example, it is only payable to artists who were nationals in the European Economic Area (EEA) and if you purchased directly from the artist and resold for less than €10,000 within three years (bit random) you don’t need to pay! DACS also has nifty little royalty and threshold calculator if you want to have a play with the figures and see what the Euro rate was on the date of a sale.
Lots where ARR is applicable are usually marked in the auction catalogue, both in print and online, with a symbol in the lot’s description, often before the title. I have seen the following symbols used in auction catalogues to denote this but do check your auctioneer’s terms and buying guide before bidding: § ‡ *
If you have any questions about ARR or want to check if the items you are buying/selling would be subject to the charge please discuss with your auctioneer.
