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Old 29-11-2010, 23:52   #1
BCW
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Purchasing Yacht in USA

Hi all

My Dad is in the market for a yacht to sail back to Australia (from California).

My Dad is a New Zealand citizen, and Australian resident.
I am an Australian citizen, and a US permanent resident (currently living in California).


We have a few questions re purchasing a yacht.... I hope you can help us out.

1. When my Dad (a New Zealand citizen, Australian resident) buys a used (not new) yacht in California, will he need to pay Sales Tax on top of the listing price?

2. What other Govt fees are incurred when buying or registering the used yacht?

3. Can the yacht be registered in my Dad's (NZ citizen) name? Or is it smarter to register the yacht in my name (I am a US permanent resident)?
If registered in my name, will I have to pay Sales Tax?

4. If the yacht is to be registered in my Dad's name, how long can he keep the yacht in the US?

5. If the best option is to register the yacht in my name (a US resident), what fees and process do we need to follow to then transfer registration to my Dad before he sails back to Australia?


6. Does the money spent on the yacht from the purchase date to the export date (such as repairs, new sails, etc) qualify as Sales Tax free? Can the Sales Tax money be reimbursed upon export? If yes, how is this done?


Thanks in advance!!


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Old 30-11-2010, 01:45   #2
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For starters when the boat arrives in Australia you will have to pay 10% GST and 5% Import duty on the purchase price if registered in your Fathers name.

If you are an Australian you will also have to pay the 15% if registered in your name.

No US taxes if your father purchases it (transaction happens off shore). There are many other threads about this on here if you do a search.

If you are a US resident you will have to pay tax in the US.

When you get back to Aus you have 30 days to pay the 15% taxes otherwise an encumbrance will be placed on the vessel by the Government.

You'll see a fair few Aussies buying boats overseas particularly in the US, sailing them home and attempting to sell them from the South Pacific so as to have them sold within 30 days of arriving in OZ. All ok if it works out but a bit of a risk if you don't have the cash spare.
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Old 30-11-2010, 02:18   #3
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You also need to consider registry issues. As I understand it, if your father buys the vessel it cannot keep its US registry. Others are better positioned to advise on this. But I understand it might take time (and a bit of money) to change flags.

Happy to see a US sailor clarify this for me as well.
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Old 30-11-2010, 02:44   #4
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Hi BCW

There are two ways to "register" a boat in the US.

1. Documented with the US Coast Guard. This is only available for a US citizen so not an option for you.

2. State Registered. You pay a fee and are given a registration number from the state. You do not have to be a US citizen or even a resident of that state to do this. The cost for this is not much in most states, maybe a few hundred dollars at most but you have to check regulations in your state.

Other issues.

I hear that state registration is not usually the best paperwork to present when traveling to other countries. Not sure why but that seems to be the common recommendation.

Most states will charge a sales tax, usually around 6%, on any boat new or used purchased in that state unless the boat leaves that state within 30 days. This varies depending on the laws of each state so you need to check the regulations in CA. I have heard that CA is very strict on this and other tax issues.

No US government fees but some states will charge an annual personal property tax which might include the value of the boat.

Any goods or services purchased for repair of the boat will be subject to any applicable state sales taxes where they are purchased.. Never heard of any exemptions or rebates for export.
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Old 30-11-2010, 03:38   #5
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Quote:
Originally Posted by BCW View Post
Hi all

My Dad is in the market for a yacht to sail back to Australia (from California).

My Dad is a New Zealand citizen, and Australian resident.
I am an Australian citizen, and a US permanent resident (currently living in California).


We have a few questions re purchasing a yacht.... I hope you can help us out.

1. When my Dad (a New Zealand citizen, Australian resident) buys a used (not new) yacht in California, will he need to pay Sales Tax on top of the listing price?

No.

2. What other Govt fees are incurred when buying or registering the used yacht?

Nil.

3. Can the yacht be registered in my Dad's (NZ citizen) name ? You will need to get Australian registration. Just fill in the 5 forms and post after scanning and sending by emai, it easy;lOr is it smarter to register the yacht in my name (I am a US permanent resident)? No.
If registered in my name, will I have to pay Sales Tax? Why register in your name?

4. If the yacht is to be registered in my Dad's name, how long can he keep the yacht in the US? . if you state rego you will be subject taxes.
12 Months on a cruising permit if you put Oz rego on straight away but there is no rush..

5. If the best option is to register the yacht in my name (a US resident) No
, what fees and process do we need to follow to then transfer registration to my Dad before he sails back to Australia?Bill of sale will be void as you have a relationship with you and your father. Oz customs will demand a valuation be carried out at your expence .


6. Does the money spent on the yacht from the purchase date to the export date (such as repairs, new sails, etc) qualify as Sales Tax free? Can the Sales Tax money be reimbursed upon export? If yes, how is this done? Yes but it is a pain and not worth the trouble. Big ticket items are brought at west marine or Defender and are not subject to sales tax; Passport required.

Thanks in advance!!


Thats the best I can do there is a lot more written elsewhere. Oh and if you buy in the USA and the boat was Built in the USA then it is just a flat 10% thanks to the free trade agreement.
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Old 30-11-2010, 04:56   #6
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For starters when the boat arrives in Australia you will have to pay 10% GST and 5% Import duty on the purchase price if registered in your Fathers name.

.
Might want to check on that
Customs may use valuation price with cost of delivery added in as well


Quote:
importing a yacht
Yachts are subject to a general rate of duty of 5% based on the customs value (basically the price paid) and 10% GST calculated on the customs value plus international transport and insurance plus the duty.

Privately imported yachts are generally valued using the transaction method of valuation when purchased overseas new or second-hand for export to Australia. Circumstances where Customs may use an alternative method of valuation include such situations as where:

the yacht was constructed by owner/labour;
the yacht has been extensively modified since purchase;
the purchaser and vendor are related parties and that relationship has influenced the purchase price; or
the original purchase price is too far removed in time.
In these instances the yacht will have to be valued by a marine surveyor in Australia. This valuation will be based on the market value and as such will include elements such as customs duty and GST. Customs will have to deduct these elements plus overseas transport from the local valuation.

Where the yacht is sailed to Australia, overseas freight will be determined having regard to essential sailing costs incurred under the most commercially viable conditions. Such costs would include sailing expenditure necessarily incurred while the vessel is actually sailing (and entering and leaving) those ports of call on the most commercially viable route. It would not include any in port expenditure related to the vessel's period of stopover

. Where supported by sufficient/reliable information, essential sailing costs would also include:

cost of maps, charts pilot books, light/radio lists, etc.
crew's hire/wages or forage allowance in lieu
victualling or food costs (does not include tobacco and alcoholic beverages)
bunkering or oil/fuel costs.
This is an indicative rather than exhaustive list, if you have any doubts or queries seek further information from a Customs Information and Support Centre 1300 363 263

Super yachts

All super yachts visiting Australia are subject to Customs arrival formalities

- the circumstances of the visit will affect the liability for duties and GST as well as immigration visa requirements.

No duties or taxes are payable for those vessels intending to cruise Australian waters for private purposes over a short period.

If a super yacht arrives for commercial purposes (either hire, charter or sale), then payment of duties and GST is required in the same manner as for any other imported goods

- owners are also required to register as a business with the ATO and may apply for deferral of the GST payable on arrival.

Where repairs or refits are undertaken in Australia for super yachts, there are concessions available that may remove the requirement for payment of duties and GST

- as well, the Australian repair/refit industry may claim GST exemption for the goods and services provided.

Further information can be obtained from the Customs office at your intended port of arrival. See details Under Ports of Entry.

importing a yacht
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Old 30-11-2010, 05:19   #7
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Might want to check on that
Customs may use valuation price with cost of delivery added in as well
He did mention his Dad was in the market for a yacht to sail back to Australia so delivery costs should not be a problem if sails it personally. Ultimately will depend on who sails the boat and if they have been paid.

If valuation price is the go, save some mud and crap and smear the boat all over. Make it look untidy with your empty beer cans lying around it. That should help lower the value.
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Old 30-11-2010, 05:53   #8
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If valuation price is the go, save some mud and crap and smear the boat all over. Make it look untidy with your empty beer cans lying around it. That should help lower the value.
Well I doubt you will know until you get it here which way they decide to go, and lets just say I was thinking of a scenario along these lines for example.

Buy boat in US
Quote:
43' Lagoon Power
Year: 2002
Current Price: EUR 239,000
(US$ 316,747)
Located In St. Maarten/St. Martin
Hull Material: Fiberglass
Engine/Fuel Type: Twin Diesel
YW# 38346-2205582

2002 Lagoon Power Power Boat For Sale - www.yachtworld.com
Boat bought in Australia used as valuation example
Quote:
Lagoon 43
AU $750,000
This 2003 model luxuriously appointed vessel was production built in France and has been fully imported.

Lagoon 43: Power Boats for Sale - Grp - Queensland (Qld) - Horizon Shores Qld
There are plenty of examples of cheap US boats having a considerably higher "value" here.
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Old 30-11-2010, 22:17   #9
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Thanks to all for your responses. It was really helpful.
Happy sailing.
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Old 30-11-2010, 22:20   #10
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Old 30-11-2010, 22:24   #11
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Priceless.....but very true.
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Old 30-11-2010, 22:57   #12
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He did mention his Dad was in the market for a yacht to sail back to Australia so delivery costs should not be a problem if sails it personally. Ultimately will depend on who sails the boat and if they have been paid.

If valuation price is the go, save some mud and crap and smear the boat all over. Make it look untidy with your empty beer cans lying around it. That should help lower the value.
I heard that if the boat is nice and clean quarantine is easier.
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