Purchasing a new boat (catamaran) process

[MattyBoy]

We are in the midst of planning our move to a boat in the Caribbean. We are fairly new to sailing. A couple years ago we purchased an old 25' MacGregor Mono and took some initial lessons and sail in the summer on a local reservoir. Last spring we completed ASA 101, 103, 104, 114 in the Abacos. I know there are already threads on pieces of this process, but it is hard to piece meal it all together for our specific situation. So, here goes...

Basically, "HOW DOES THE PROCESS WORK?

Info
1.) New Catamaran. Once ordered it will take approx. 8 months for it to be delivered. Approx. $450k USD
2.) We would need to put a deposit down of 10% at time of order. At loan inception we will put down another $100-$150K
3.) Take delivery in St. Maarten or USVI
4.) Would like to have it US Flagged
5.) Do NOT want to pay import tax/Use tax in US
6.) Would like to have unrestricted Insurance for the World or Whole Caribbean.

Questions
1.) Is the assumption correct, we would need Insurance before the Bank would complete the loan?

2.) Will we have trouble getting insurance?

3.) We are thinking of selling our 25' MacGregor soon but wonder if we should keep it till the new insurance goes thru? Have heard insurance is easier to get if you already have insurance.

4.) Would a log of sailing our MacGregor help in anyway with Insurance?

5.) Will we have trouble financing from the typical financiers when purchasing a boat in St. Marteen? (Essex, BoatLoan.com (IFG), etc...)

6.) Should we have it US Flagged?

7.) What else am I not thinking of?

Note 1: This isn't a discussion if we should buy new or used. We are definitely buying new.
Note 2: Be gentle!!

[Eggbah]

Are you a US resident and where will you be keeping the boat?

For the loan amt you'd need, Essex requires 25% down (must be a US citizen or reside in the US if not a citizen). Is the first 10% and then a 2nd installment of $100-150k a requirement by the builder?

Insurance:

I believe this is the same as a home and a car. Yes, you need to obtain insurance policy, but it would be paid at closing (someone please correct me if I am wrong). Every time I buy a car, I have to provide proof of insurance or the dealer will not release the vehicle to me. I used to work in real estate law and the lender would not clear the loan to close (day of closing) without prop insurance on the settlement statement.

Your current records may help to reduce the cost. Have you contacted your current carrier to see if you can bundle (home/auto/etc)? You really should contact them first to see what you have to provide for a quote for coverage.


Not being a boat owner at the present time, I am not well versed to answer some of your questions, but this seems like trouble waiting to happen:

Originally Posted by MattyBoy

4.) Would like to have it US Flagged
5.) Do NOT want to pay import tax/Use tax in US

Are you a FL resident by chance? If you can be taxed, you will. Not sure about other states at the moment, so I will leave a link for FL for now: FL Dept Rev - Florida Sales and Use Tax

From the link: "If you buy a taxable item outside Florida and bring it into or have it delivered into Florida and you did not pay sales tax on the item, you owe use tax."

If you could provide a bit more info on where you plan on docking, others will be able to help you out even more.

[MattyBoy]

I am a US citizen and live in the midwest.

I am not trying to pull a fast one on the US Gov't. When and If we bring it to the US, we will pay use tax.

10% down to get the order started. That amount will then be applied to the sale of the boat when it is time to "Close". Basically, we would put down 20-40% at time of "Close".

The boat will be kept in the Caribbean.

We will probably keep some type of Residence in the US. But, We will be living on the boat the majority of the time.

[Cotemar]

MattyBoy,

Your bank will want the boat US CG Documented.

The US import tax (1.5 percent) is small in comparison to any states (uses tax).

Register your boat in Delaware or Rhode Island, both of which have no boat state tax.

Boat will have to be insured before bank puts in there money.

Insurance will require your Atlantic crossing captain and crew information.

[Eggbah]

Originally Posted by MattyBoy

I am a US citizen and live in the midwest.

I am not trying to pull a fast one on the US Gov't. When and If we bring it to the US, we will pay use tax.

10% down to get the order started. That amount will then be applied to the sale of the boat when it is time to "Close". Basically, we would put down 20-40% at time of "Close".

The boat will be kept in the Caribbean.

We will probably keep some type of Residence in the US. But, We will be living on the boat the majority of the time.

Oh I didn't think you were trying to pull a stunt, I was just saying that they will do what they can to tax you.

You shouldn't have a problem with the loan if there's a lender that will lend for an out of country purchase - don't hold me to that statement though.

I think you'd be in the clear tax wise though if it's kept out of the country for a bit. I found a couple of old posts and now I can't find them. I read one on here about keeping the boat out of the states for 6 months. Hunting for it now.

Your plan sounds very much like my 10 year +/- plan.

[Eggbah]

Found a few, not sure if they would be of any help though.

http://www.cruisersforum.com/forums/...ten-36597.html

http://www.cruisersforum.com/forums/...nds-45484.html

http://www.cruisersforum.com/forums/...nt-160345.html

[Symphony]

congrats on getting a boat in the Caribbean, MattyBoy.
I have helped deliver two new french cats. You should budget a chunk of cash and lots of time for repairs when you take delivery of your new catamaran (a very large chunk of cash if it is a Bali) as there will be many things to fix, tweak, or actually have working. There are lots of things to sort out on a new boat, especially after she's crossed the pond from La Rochelle.

St Maarten has Budget Marine and lots of quality service technicians as well as a superb airport. When you must cast off from the brokerage/ charter dock you can anchor inside the lagoon for free and have easy dinghy access to anything you might need at good prices.

Enjoy it all, even the repairs.

[LagunaRed]

We just went through this with the purchase of Summer Kai our Lagoon 52F. I would budget at least 10% above your boat price for other "stuff" because it just adds up on a new boat. I would also have the boat professionally surveyed after it gets across for warranty issues. As for insurance, you need to have it before they deliver and you should get it documented as part of the loan process. We went with a new boat for lots of reasons but there is no question there will be some issues to deal with and you want to leverage your warranty as best you can. We retired a few weeks ago and we are headed out with our two little kids as in June when my oldest finishes school in June. Hope to see you out there!

[DotDun]

Originally Posted by MattyBoy

......
4.) Would like to have it US Flagged
5.) Do NOT want to pay import tax/Use tax in US

I believe you'll have to import it to get USCG documentation. State tax is based on where the boat is located.

[SV DestinyAscen]

Originally Posted by DotDun

I believe you'll have to import it to get USCG documentation. State tax is based on where the boat is located.

I don't think the USCG is the import tax authority - almost certain they'll give you documentation even if your boat never gets imported as long as you're USC.

[Cotemar]

Originally Posted by SV DestinyAscen

I don't think the USCG is the import tax authority - almost certain they'll give you documentation even if your boat never gets imported as long as you're USC.

DotDun is correct.
You have to pay the US Import tax to CG Document your vessel.

[SV DestinyAscen]

Wow that's truly a surprise - I guess I should be glad that CBP and USCG works together on that.