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Old 24-07-2013, 22:18   #16
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Re: Purchasing a boat without a broker in California

It seems all of it is between the seller and the broker, why would a buyer pay anything other than tax?
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Old 24-07-2013, 22:28   #17
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I agree and that was the example I used in my first post.
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Old 24-07-2013, 22:32   #18
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Re: Purchasing a boat without a broker in California

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Cowboy, take off your jacket and check to see whether Mr. Yacht Business Owner pinned a target to your back.
Is that not customary? I would figure standard practice would be for the buyer to pay sales tax. I can't think of any good whee the seller picks up the tax. Maybe I'm not understanding your comment.
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Old 25-07-2013, 06:03   #19
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Re: Purchasing a boat without a broker in California

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Is that not customary? I would figure standard practice would be for the buyer to pay sales tax. I can't think of any good whee the seller picks up the tax. Maybe I'm not understanding your comment.
Cowboy, Your broker is right. The seller pays the commission to whatever brokers are involved and the buyer has to pay the sales tax which is the same as the euro VAT. It's the same tax when you buy a car and varies by municipality and is usually slightly less than 10%. There are ways around it but you need a large expensive boat to justify the costs.
And BTW Florida charges 6% but caps it at $18,000 so if you are spending over $300K then buy it there but if you take it to Cali then you will owe that almost 10% on top.

FAQ - Use Tax on Purchases of Vehicles, Vessels, Aircraft - Board of Equalization
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Old 25-07-2013, 07:19   #20
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Thanks SC. He wasn't a broker but owned a couple charter boats and ran one of the sailing schools over there. He was telling me about the luxury tax in California on boats and that it is paid every year on a declining scale. Similar to buying a car here in Arizona I suppose. He was saying boat purchases must go through a broker in CA which I found rather interesting. This was a good thread that cleared a few things up.
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Old 25-07-2013, 07:35   #21
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Re: Purchasing a boat without a broker in California

Well, he is wrong about the must use broker item unless that is a requirement for a commercial boat sale but I still don't think so.

The luxury tax is now called a (personal) property tax and is about 1% per year. You usually will pay that to the county where the boat is kept. The tax rate stays the same but the boats value usually goes down which is what he means by the "declining scale".
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Old 25-07-2013, 07:38   #22
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Re: Purchasing a boat without a broker in California

You do not need a broker, a title search company or a documentation service company.

No title search and even USCG documentation does not guarantee that a boat is lein free.

Your ONLY protection is title insurance...so choose wisely....granted most private companies that title search also sell the insurance...but like all insurance...costs good money but can pay for itself...only you can decide.

Bought current boat with neither but used a good contract and had a reasonable idea of the seller so I bypassed the title search/insurance.

Did my own USCG documentation...easy and inexpensive compared to the documentation services.

If it looks complex or you have not the faintest idea about the seller...more people /companies in on the sale enables you to place more blame elsewhere and recover money if things go sour.
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Old 25-07-2013, 22:53   #23
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Although I did purchase thought a broker I used Donna Jenkins Documentation Service in San Diego even though i am in Long Beach. Where are you and the boat in California?
I'm in the SF Bay Area.
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Old 26-07-2013, 01:15   #24
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This will be my first boat purchase. I'm planning on doing a full survey and sea trial but what do I need to worry about when not using a broker. The boat is a Hans Christian and it will be under $100,000 in the state of California. I am a California resident. I'm not against brokers but I found a boat that I like and he's not using a broker.

Any advice would be great!
Cam,

The primary thing I would worry about in your case is clear title. A $100k Hans Christian ain't some dude buying $2,000 O'Day. The mechanics of the process is the same but the risk(money) is larger. With that kind of skin in the game I'd at least use a marine title company and escrow service. Purchase the title insurance policy too.

Erring on the side of caution when in doubt is not a crime, especially with this being your "first boat purchase".
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Old 26-07-2013, 05:43   #25
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Re: Purchasing a Boat Without a Broker in California

I forgot to mention that you will be hit with a use tax bill which is the same as sales tax if you buy it privately. It's the same as privately buying a car. You might be able to fudge a Bill of Sale downward and save a few bucks.
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Old 26-07-2013, 07:51   #26
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Can someone explain this luxury tax? Is it 10%? Is it paid every year on a decline balance?
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Old 26-07-2013, 07:59   #27
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Re: Purchasing a Boat Without a Broker in California

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Originally Posted by Sailing Cowboy View Post
Thanks SC. He wasn't a broker but owned a couple charter boats and ran one of the sailing schools over there. He was telling me about the luxury tax in California on boats and that it is paid every year on a declining scale. Similar to buying a car here in Arizona I suppose. He was saying boat purchases must go through a broker in CA which I found rather interesting. This was a good thread that cleared a few things up.
that luxury tax on yachts was repealed years ago..kali merely has a 8.75 percent sales tax called equalization tax that needs to be paid on purchase, even if no money changes hands.
is one time deal.
there are stipulations regarding off shore purchases that are changed occasionally and as governor sees fit. last i heard you could buy in kali, fix for only up to 30 days then get out of dodge to mexico for a year to avoid it. but that was 3 yrs ago--could be different by now.

i have used dona jenkins organization a few times now and they are excellent to use for title chases....worth the money.
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Old 26-07-2013, 08:10   #28
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Thanks Zee. Makes me feel better. A bit anyways. Do you know if they base it on the amount on sales receipt or some kind of blue book value?
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Old 26-07-2013, 08:26   #29
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Re: Purchasing a Boat Without a Broker in California

equalization is based on selling price--what you paid is taxed....spozedly equalizes the ones who document with those equalize with those who register at dmv..sales tax paid by buyer. broker fees are paid by seller. i dont use brokers. i do use dona jenkins and have to be used by board of equalization....
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Old 27-07-2013, 05:22   #30
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Re: Purchasing a Boat Without a Broker in California

There are a few questions you need to answer first. Is the boat documented at USCG? If not you should require a Declaration of non-registration at the USCG Documentation center to prove she is actually not registered or an Abstract of title (see attachment) if she is documented, so you can check whether there is still a mortgage upon the vessel and whether the seller is the lawfull owner. Deletion of the documentation or a transfer of ownership can be done after you have signed the Bill of Sale at the final delivery. If there is a mortgage involved you want the seller to pay off his mortgage and fill in the 'SATISFACTION OR RELEASE OF MORTGAGE, CLAIM OF LIEN or PREFERRED MORTGAGE' (see attachment).

Deletion (when new owner does not want registration and the boat is documented). The seller sends the following documents to the US National Vessel Documentation Center:

- Request of Deletion of Documentation in writing, including Vessel ID number and HIN/CIN code. (see attachment)
- Bill of Sale (see attachment)
- Original Certificate of Documentation
- Send Certificate of Deletion to the buyer (make sure the seller gives this to you)

Transfer of ownership (when new owner wants registration and the ship is documented). Send the following documents to the US National Vessel Documentation Center:

- Bill of Sale
- Original Certificate of Documentation(from former owner)
- Application for initial issue of Certificate of Documentation (see attachment)
- Authorization of credit card transactions (see attachment)

In case new owner wants to register/document and the boat is not documented now. Send to the US National Vessel Documentation Center:

- Application for simplified Measurements (see attachment)
- Application for initial issue of Certificate of Documentation
- Bill of Sale
- Builders Certificate (see attachment)
- Declaration of non-registration
- Authorization of credit card transactions


With regard to state registration and taxes in California you can check out the following link:

BoatUS - Government Affairs - California Boating Information

Make sure the seller notifies the state register he has sold the boat.

Please send me a personal message if you need a professional sales agreement and you also want a protocol of delivery.

Be sure to ask the seller for the following paperwork:

- Original invoice including VAT + proof of payment or a VAT Statement.
- Former Bill of Sale to proof he bought the boat and is therefor entitled to sell the boat to you.
- Builders Certificate to proof the boat is built according ISO, CE and or ABS requirements (se attachment. let the builder fill this in if the BC is missing).

Good luck!
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