Buying a Boat in Mexico

[Solosailor]

I could use a little advice around the purchase of U.S. registered boats in Mexico. What are the pit falls to watch out for? Is this a good idea or one to be avoid or not considered at all?

[neophytecruiser]

I'm not an expert when in comes to buying boats in Mexico, however, one advantage would be savings on sales tax because I believe that transaction would qualify as an offshore delivery. There are other stipulations that must be followed in order to be free of sales tax. You may want to consult with a reputable yacht broker or maritime attorney for advice. Whatever is decided, I'd strongly recommend a good survey by a reputable surveyor prior to buying the boat in question. Good luck and good sailing!

[speakeasy]

Originally Posted by Solosailor

I could use a little advice around the purchase of U.S. registered boats in Mexico. What are the pit falls to watch out for? Is this a good idea or one to be avoid or not considered at all?

I'm no expert either. But I did just buy a boat, my first, in San Carlos. The process is laid out on the broker's site who sold it to me. Sea of Cortez Yachts. I made an offer after viewing pics taken within two months and discussions with the broker as to the boats condition and history. I had him inquire with the owner on specifics of the build process and get back to me. After looking online for 18mo or so, and kicking half a dozen tires, I decided I wanted this boat I offered 60% of ask, they countered with 75%, I went up a few thou and they said they couldn't let it go for less than their last offer at 75%. I waited a week, thought about it all week and decided to make a deal. I don't have a bunch of money and knew the market was dead and was looking for more boat with my less money.

Next, I scheduled a time to survey and sea trial. The previous owner would had to come down and rig the boat since it was on the hard. Getting to talk to the owner all during the day of survey and a hour the day before, helped me trust the boat and decide quite a lot. And when I shook hands with him at the end of the 8 hr. survey, I did it on condition he'd come spend of few days cruising the boat w/me a few month hence, to go over all systems so I could learn them and build my own check lists. Plus, hey, I liked the guy, even tho' he was Canadian. The boat is a 41' custom CC cutter so there is idiosyncrasy inside and as it's rigged.

The brokers were American and use an escrow co. in Anacortes, WA, which held my 10% deposit wired to them before I went down for the survey. After making the deal and signing the sales agreement in Mexico with the broker, I had a letter from owner granting me the right to use the boat immediately. However, I couldn't then and returned home and received from the escrow co. instructions for funds transfer to finalize the deal and Coast Guard documentation request papers to sign. The escrow co. also did a title search for their $380 fee. The USCG paperwork will be changing registration from Canada to my USCG number, and at the same time changing the name of the boat in the process. You can change the name later if desired, it's just a lot more paperwork and money to do.

Brokers are brokers, helpful, charming, accomodating. Their salesmen and one shouldn't rely totally on what they tell you, but I had no issue with them. They also gave me the old Mexican import certificate and emailed me the site where I can change it to my name online and pay the fee for a 10 year permit. You can get Mx fishing licences , car insurance the same way. The drug violence media reports have decimated tourism and everyone there with a business is anxious for tourists to come and spend. Plus, the dollar has been going up for 6 months and so you get more pesos for you buck.

The PO, as it would happen, lives 50 miles up the road, in Ventura, from me here in NW Lost Angeles. So we are going to get together to shoot the breeze and I'm gonna pick his brain as best as this ignorant first boat owner can figure out to do.

I also felt odd about buying in Mexico before I did it. But, really, besides the irritation of travel and distance to rerig or provision from "home", it was quite easy and pleasant. Hope this is helpful, Jon

[Solosailor]

Speakeasy: Thanks you post helps me a great deal. The process you outlined is what was explained to me by the Broker. I feel a little better now. Interestingly enough. I have offer about 66% of the asking price. I will be quite firm on this. The boat needs work which is going to be a challenge, but that's why the price is low. At this point its a wait and see if it's accepted.
P.S. be careful with those Canadians. They're a terrible bunch. Do you know why the say "Ah" a lot? PM me and I will tell you, ah.

[speakeasy]

Solo, good luck with your purchase. I don't know where you live, but getting parts for her down to Mexico could be an issue. If what you need is not large you could probably just drive them down unnoticed. And I think you could probably find good help there for little money. I was told that Guaymas/San Carlos has great fiberglass workers. Labor at the Guaymas marina seco runs about $10 a day. But the import duty is 40% if new parts are declared and not accompanied by the certificate people get for "replacement parts" before leaving Mexico for the states. That duty is why all transaction paperwork is handled in the US.

Others here who have been or are cruising the Sea of Cortez can give you more in depth and up to date info if you run into snags. Again, good luck.

[svcambria]

But the import duty is 40% if new parts are declared and not accompanied by the certificate people get for "replacement parts" before leaving Mexico for the states. That duty is why all transaction paperwork is handled in the US.

Yes, the transaction is handled outside Mexico because it has to appear that the (temporarily imported permit - TIP) boat was not sold in Mexico, which is beyond the limits of the TIP. Authorities don't particularly care about that as long as the transaction is between gringos and some effort is made to keep it discrete.
The TIP allows you to maintain your boat with parts and materials brought in from outside Mexico without duty, but does not allow you to improve it without duty. It's a fine distinction but one you will not succeed with at the border. To bring in (back) stuff which has been serviced in the US you have to check it out of the country through the customs office (Aduana) and declare it on return. With the checkout you don't have to pay duty on that item. All other stuff made in North America gets a duty of about 9% now (decreasing every year by 3%, the NAFTA agreement). Stuff made in Asia gets a duty of about 50%, even if it was sold in the US.
Labor is cheap in Mexico, but not $10 per day cheap. The minimum wage is 156 pesos per day ($13 to $15) for unskilled manual labor; fiberglassing, painting, etc. the wage will be more like $40 to $80 per day depending on how you negotiate. Plus kick-back to the yard. Still a good deal; if you hire the staff at the yards though it could run more like $20 to $40 per hour.
If I were looking for another boat I would buy it in Mexico. Many of the boats here have been recently refitted for cruising which is only partially reflected in the selling price.
Michael

[Jazzman]

What's wrong with Canadians, and it"s "eh" not "ah"

[speakeasy]

Originally Posted by Jazzman

What's wrong with Canadians, and it"s "eh" not "ah"

Not a thing! eh? Just tossing out bait to see who would rise to it. The last bait toss I did was seeking out racing sailors. Nary a one surfaced.

[Mate]

Im a bit slow and just found this ,but very intersted . Am I right in saying that you can purchase a US registered boat in Mexico through a US broker , say in CA and if you are not intending staying in either Mexico or CA you can call it an offshore sale and not pay any tax,s in either country . I will have to re register with Aussie rego before leaving Mexico .

How do you get the boat out of Mexico when you go to leave with customs .
This all doesnt sound to bad if I undertsand it corectly .
Do I ?

I have a seller telling me that the boat will have to be skipperd back to the US at an extra cost of 5k . He seems a nice guy and hope he just has his wires crossed .
Or is this because I intend to take the boat back out of Mexico with new Aussie rego.Why would this be any different .
I need help with this fast , as Im nealy ready to purchase as well .
Thanks.

[speakeasy]

Mate, the sales tax rule for Calif. was recently changed from 90 days to one year, during which time if you bring the boat back to Calif. in that time frame, they want sales tax on the transaction. If you don't take the boat to Calif. and register it while to Australia while it's in Mex., you will only need to get a TIP temp import permit for Mexico which is about $70 for 10 years. To get the TIP you will need a valid registration of some sort, but it is easy to get otherwise. Maybe the owner is just assuming you will bring it back to the US. You can get the TIP online, mailed to you in the US in about 2 weeks. Presumably, you've inspected the boat in person. Mexico turns a blind eye to the transfer of boats here, with all sales transactions taking place thru. us escrow companies.

I just took possession of a boat I bought in Guaymas in June, and the escrow company in the US then got me a USCG documentation, switching it from
Canadian registry. Easy. With that I got the TIP. I don't intend to take it back to the States soon so no sales tax and no county property taxes for me. I know nothing about getting Aussie registration but there are other Aussies aboard here who could help you with that.

I'm not hip to all the legalities so take my info with a dash of salt and confirm. Good luck.

Jon

[Mate]

Jon , thanks .

[windance]

All the legalities aside, In a 1996 I bought a 43 ft sloop through a well established boat broker in San Diego. Paid the 6 1/2 % (or whatever) sales tax which was clearly itemized on the bill of sale.

2 years later I get a phone relay form my brother over the SSB while in the Rio Dulce in Guatemala and informed that my bank accounts were frozen by the Calif. tax equalization board for non-payment of sales tax on the boat sale. Took a year to clear it up.

Be scrupulously careful with Calif. boat purchases.