General Boat Related Tax Information

Boat related taxesSales taxes are levied in the U.S. by the individual states. Each state is somewhat different in their approach to this subject. Whether you owe this tax has to do with where the yacht is registered and where and how the yacht will be used. If you understand the system, you will know how to gain legal exemption.*This information is general in nature and purchasers are encouraged to seek experienced legal counsel in yacht acquisition planning and implementation. Catamaran Guru™ is not a licensed Tax Attorney or CPA and is not qualified to give legal or tax advice but we can put you in touch with experts who are.

Write Off Ownership Expenses

If you live in the US or most European countries, you can reduce your taxable income by writing off certain yacht ownership expenses. The most common U.S. tax benefit is to treat your yacht as a second home, which is possible if you don’t already have a second home and your primary residence is valued at less than $1 million.  This method will allow you to write off your interest expense on your loan.  The other method is by actively managing your yacht in a charter business. Many travel agents do this. This method will allow you to write off your operating expenses as well as interest expense.

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Marine Survey: Why Do You Need One?

marine surveys give peace mindWe highly recommend that every prospective buyer of a pre-owned yacht get a marine survey done before any money changes hands! A marine survey is a detailed inspection of a yacht by an accredited marine surveyor to determine its current condition. More importantly, it will determine the yacht's seaworthiness and whether the vessel is safe to operate in the conditions for which it was designed.

A good surveyor will be able to point out major problems, e.g., delamination or blisters and smaller deficiencies like gelcoat repairs or hatch leaks. With this list in hand, one can make a good determination of what it costs to take care of the major issues and whether the smaller issues are easy enough to deal with over time. Once you determine that the major stuff is not a deal breaker, you can move on to figure out from the survey results, what else is needed to put the vessel in good working order as well as repairs / maintenance / replacements likely to be required in the near future such as new sails or new lines.

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Yacht Purchase Pre-Survey Checklist

catamaran haul outIt is important to be as informed as possible when you go into a yacht purchase. Paying a professional surveyor to inspect the yacht and evaluate its condition is part of that process. However, before you set out to look at the boat in question, get as much information as you can about the boat from the owner or listing broker.

The cost of traveling to and from the these yachts as well as the cost for a haulout and survey can add up pretty quickly. It is very disappointing, after spending all the money for travel, surveyor, and haulout just to find out that it was a deal breaker right from the start. We put together a checklist of some questions to ask and things to do before you even think about travelling to see a particular yacht. Once you are satisfied that you have the answers to your questions and are still interested, take a peek at the yacht armed with our Pre-Survey Checklist. Below, we put together an initial inspection checklist to help you do a quick inspection of the boat to determine if it is worth a further look. This checklist is not designed to replace a proper survey, but it will give you a good idea of the general condition of the boat and whether you wish to continue looking into buying the boat. Make lots of notes and take pictures to use for later for analysis and comparison.

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Yacht Brokers: Why Do We Need Them?

yacht brokers sell yachts There has been a lot of chatter lately on blogs and forums about yacht brokers and we thought that we should address some of the issues and questions. In this article we hope to clearly articulate the value the consumer/buyer can experience from the broker's negotiating skills, marketing skills and market knowledge. The purchase of a cruising yacht is probably one of the biggest investments the buyer will make in their lifetime so it makes complete sense to ensure that they have the very best representation.

Being represented by a professional brokerage house does not add a penny to the yacht purchase price for a buyer. the fee is totally paid for by the seller. Yes, the buyer's broker is totally free to the buyer. So why not get your own broker to represent your interests when looking to buy a boat? You can have the listing broker represent both you and the seller but consider this: the listing broker's job is to represent the seller and to get the highest possible price for the yacht, which is not necessarily your objective as the buyer.

That is why it's best to have your own broker to represent your interests exclusively. When going into a purchase of this magnitude, yacht buyers need to know that they have a team of professionals that are acting entirely in their interests. Find a broker whom you feel comfortable with and trust and set him/her to work for you. We have had buyers looking for as long as 5 years before actually buying (not typical, thankfully). But a good yacht broker will stick with you, educate you, and guide you through the process.

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