A Pile of Questions About Purchasing a Boat in the US

[sascha189]

Hi All,
As you have certainly read above, I have a couple of questions!
Most of the legal kind, where I hope this thread is not too misplaced.

I'm a UK resident (german citizen/passport) and plan to buy a sailboat in the US and sail her back.
This is not my first boat and I am not looking for any sailing and general purchase advice. In most cases I already did my research and just want confirmation ;-)
(for easy reference i will even label my questions!)

1. Are yacht brokers in the US required to have a trust account, i.e. an account where my money is safe e.g. in case the brokerage goes bust before completion of sale?

2. related to 1., How do I ascertain that the account where have to pay my monies in is in fact a trust account?

3. My plan is to buy the boat, have it taken off the US register, register it under a british flag and then sail away. Am I right here or am i missing something?

4. Tax, in particular VAT. Do I have to pay VAT on arrival in the EU/EEC or can I defer it to british customs if my first port of call in europe is not the uk?

5. Are there any other taxes when importing to the UK? (it is a used boat i am looking at)

6. The boat is a bit older, pre '85. So am I correct in assuming the boat does not need a CE certificate/rating?

7. I had a look whether I need a visa entering the us and getting away on a boat. And it looks that i have to get a visa as i am not eligible to enter under the visa waiver program since i will not have a return flight ticket. I have not yet called the US embassy here in london (mainly because its a premium number). so what should i expect? will i have to pay a deposit guaranteeing for a return flight or is this not necessary for EU citizens?


Strangely enough HMRC never answered my email enquiry even after 14 days, whereas the CBP gave me an answer within 48h!

Phew, this is already an adventure and I havnt even gotten to buy the boat yet!


oh before i forget

8. can anyone suggest a good surveyor in the Norfolk, VA area?


Thanks for your effort in answering my questions! i am sure there are more to follow


Sascha - M0TRS

[h20man]

Originally Posted by sascha189

Hi All,
As you have certainly read above, I have a couple of questions!
Most of the legal kind, where I hope this thread is not too misplaced.

....

7. I had a look whether I need a visa entering the us and getting away on a boat. And it looks that i have to get a visa as i am not eligible to enter under the visa waiver program since i will not have a return flight ticket. I have not yet called the US embassy here in london (mainly because its a premium number). so what should i expect? will i have to pay a deposit guaranteeing for a return flight or is this not necessary for EU citizens?

Sascha, regarding a return flight.... if that is all it takes to be eligible for the visa waiver, then buy a fully refundable return ticket, (hell, even first class) since you have the money for the boat....

and....

before you buy the boat, return the ticket for cash..


Best in your endeavors.

[Pblais]

1. No they are not required to do so though most do. The idea is you don't get the title and they don't get the money until you both complete the contract. The broker keeps your 10% down. You get it all back if you cancel the contract for most any reason.

2. You can't. Should they go belly up they will have legal problems that won't let them be viable again. They would need to go out of business. It could happen, but I've not heard of it. Your 10% won't let them retire in a style they would accept.

3. If you are not a US citizen you don't have a choice only a US citizen can document a boat in the US - period. You would need to see the process of securing a British Registration. You would need to be a British citizen. There are a handful of countries that let non residents document but it's a legal trick that works and a small set of countries. It costs extra money.

4/5. Tax issues will not be part of the registration so you'll need to deal with that. You have a limited amount of time while here in the US to avoid any US based taxes. Until the boat reaches EU water you don't owe any EU taxes but when you do the fun begins. Tax advice you get on the Internet is not worth what you pay for it.

6. You won't get one here.

7. You should buy the ticket since there is no assurance you will buy a boat and actually leave on it. No one really is going to take your word for it. Make sure the ticket is refundable. You'll need the money when you get back since you'll own a boat and we all know you'll need more money. Think of it as a nest egg you'll spend the first day you get back. Now that you will be owning a boat it's cheap and it's refundable. You'll never get a boat deal like that.

8. Seeing is how I live here I would say we have more surveyors than almost any place. There are two national certifications out there SAMS and NAMS. A surveyor can be called one with no qualifications BUT if they need to do insurance work or provide evidence to a bank they must be certified. A good argument can be generated over who is better but if you get one certified by of either you will meet minimal requirements.

I like to pick surveyors by calling them on the phone, and asking if they are available for the date I need them and then talk about the process they will use. You need to get one to show up is number 1. If you don't like the phone conversation then try someone else. You are basically renting someone for the better part of a work day and you want to be there and learn all the things that won't be in the report. You'll want the ability to tell the survey to quit and you won't buy the boat and he will offer a discounted price. Expect to pay for travel time door to door, so don't be hiring some hot dog surveyor from New York to fly down. It is better not to try to hire one before you find a boat. Most of the surveyors know most of the brokers. It's often supposed to be a big deal not to hire one that does. Actually good brokers know good surveyors. Good surveyors when they find a problem come straight at you and the good ones don't make the stuff up. You want to know the facts soon and efficiently. No serious surveyor is doing side deals with brokers. If word ever got out they would be history in the business.

Once you get past a surveyor that is available on the day you need them and you feel you could stand to spend a day with them you really should be fine. You are only going to learn what they can find in a part of day. You'll find more than that after two weeks. It's how surveying works, but you really want to be there and learn all you can.

You are not hiring the broker so don't expect to fall in love. I would not get one of your own. Doing your own homework should tell you what you need to know. It's OK not to like them as they just handle the paperwork. You will part company and never speak again - deal with it. They work to close deals not to chat and they don't have to know anything about boats. Both boats deals I've done the broker helped me with a lot of things. when I sold my boat the broker helped the buyer get answers so we could close the deal quickly. Good brokers do that stuff. Many do but don't be demanding such things from sales people. You need to take charge of your efforts to find information and make decisions. All help you get is a bonus.

Bring money! Have a way to put down a 10% deposit in cash to write a contract to purchase. As a foreign buyer no seller will take you serious otherwise. I refused to sell my last boat to a guy from Canada because he never saw the boat and wanted to put down a deposit. You need to act like a real buyer to be treated like one. Impress that you want to close quickly with cash! If you need a loan don't buy the plane ticket to come over. A protracted deal always falls apart. Time is not your friend.

The boat market is not that great right now. It may seem like a buyers market but a lot of good boats are not listed now because they don't want to give them away. If I were selling now I wouldn't sell and I would wait. If you want a deal make sure you have access to cash quickly. It's the one thing that eliminates all the foreign buyer concerns. Nice British chap with cash to spend today sounds just so much better.

Good luck in your quest. Try to learn as much as you can before you arrive. We have lots of stuff in CF to help.

[rgscpat]

Would Sascha receive any benefits from documenting his boat with British Commonwealth "flag of convenience" places (Isle of Man, Grand Caymans, etc.)? Would they be easier for a German passport holder than actual British registry? I have no clue.

[Pblais]

I have no clue.

The tax advantages need to be offset by the costs. You don't get a "flag of convenience" for free. For some not so strange reason they cost a lot. There is a local agent that makes you pay regularly for the "service". It's still officially only legal for residents of a country to register the boat in that country but using a local agent there is a way to take advantage of the local loop hole. It is only a loop hole in the regulations of the local country that allow this practice. It only works where the local country has no taxes due. It is totally legal but it is by no means free.

If you have a very high value boat then the advantages start to surface. It also still has issues about where you keep a boat and how long it can remain there before you may owe local taxes. For example, were I to register my boat in such a place at some cost yet keep my boat down the street most of the year like I do now - I would have no tax savings what so ever.

You need a boat title that is officially recorded some place. Country based registration is preferred. You have to prove you own your boat on demand by any government official that has the police / military power. Not being able to do so could have you accused of boat theft. It's why you and boat thieves can't register a boat easily.

You could register a boat here in VA for 5.5% of purchase price or a max of $2000 and not be a resident here. If you are here on a Visa you become the problem not the boat. The boat would have no problem other than annual personal property tax that isn't huge.

Looking at taxes is more than just the one time tax and it matters where the boat stays as much as where it's title is recorded as well as where you are. Lots of threads on CF about this topic and it may or may not be helpful to read through them.

[denverd0n]

The rules about escrow vary from state to state. In Florida brokers are required by law to put the deposit into an escrow account managed by a third party. In some states the broker is allowed to put the deposit into their own account, or just stick your check in their pocket and keep it there!

Here's a link with good information about escrow and the buying process...

White Paper on Escrow - Boats.com

[Anders]

Originally Posted by Pblais

You would need to see the process of securing a British Registration. You would need to be a British citizen.

British citizen or EU citizen ordinarily resident in the UK.

[sascha189]

Thanks for your swift replies! As Anders already said I have no problem registering my boat in the UK as i'm ordinarily resident here. (Current boat is british flagged as well) Main reason for my question 3 was whether there are any special regulations about unregistering/ buying a ship in the us by a foreigner.
My question wasn't very clear there...

I just found out that return flights to the US are, weirdly enough, cheaper than one-way-flights so will get a return anyway as a visa would cost me more than $100!

Anyway, as I won't have the cash until end of this month I will forage this forum for more info and get in touch again with those customs office(r)s!

Thanks, and I can assure you will here from me again!