Buying in NZ - What about GST & Duty?

[royelliot]

Hey team,

I have decided to sell my house after living in the UK for the last 5 years and head out into the pacific for the next season. I have been looking around at other threads to unpick what might be the best option for me..

- I have both NZ and British Passports
- I would like to buy a blue water yacht in NZ and sail off into the pacific
- I don't know where I want to put roots down at all yet - unlikely to be NZ
- I suspect I will look at selling in Australia (maybe... but if I can convince the wife maybe I will end up further round! But likely Oz)

Would appreciate advice from those that know about GST/Duty about what the most money 'efficient' way of doing this is.

If I buy a boat that hasn't been 'imported' and is flagged elsewhere are there tax implications in the country where the ship is registered? (i.e. if I purchased a Dutch or British flagged boat do I end up paying something in those countries and nothing in NZ?) Or do I bring a briefcase of cash to the pub and settle it over a beer and handshake? If I am in New Zealand and I want to buy a boat do I need to ensure it is imported? Are there advantages of buying a NZ boat and registering it in the UK as I also have one of those passports?

As I am heading offshore, I will be looking as a top priority at something that has or is close to CAT1 (for my own piece of mind). I understand that there are regulations in NZ about requirements for CAT1, is this another good reason (to avoid bureaucracy) to look at registering elsewhere?

Thanks massively in advance. I have just joined what looks to be an excellent forum and any help will be appreciated.

[matauwhi]

G'day, Mate. I have a Mason 53 here in New Zealand that has been fully imported (GST & Duty) paid if you are interested. Since you have a British passport, you would be able to use the U.K. flag to avoid any Cat 1 hassles while maintaining the ability to leave and return to New Zealand as often as you pleased without any further import (tax) issues.

Based on what I know of the latest situation, when the winds take you over to Oz, you would start with the basic temporary import, and start the permanent import process if you want to live there long term.

Pics of my Mason 53 are in the album on my profile page and you can always send me a private message if you want to discuss further. All the best. Cheers.

[El Pinguino]

Your NZ passport is going to bite you on the bum as you won't be able to play the 'furriner' card in NZ.

Even if you arrive on a UK flagged yacht from the islands frinstance you will be a kiwi and have to import her on arrival. Buy a 'temporary imported' boat in NZ and once again...you will have to import her.

However although you will have to import her I don't think you will have to re-flag her.... so you can avoid the Cat 1 business

I'm UK/Aus passported and kept my UK flagged boat in Australia for 9 years.... had to import her but never had to re-register.

Most efficient way financially would be to buy a UK flagged boat in the islands and just go sailing... don't bring her back to NZ at all.

There was a long and informative discussion on these issues not long ago...I'm sure some-one will point you towards it.

Welcome aboard

Ping

[DumnMad]

Buying a second hand boat in NZ from private ownership has no gst in the transaction. But if you go & stay in Aus for more than 3 years you presently pay 10% of its value, probably 15% in 3 years time.
Cat 1 can be tricky if your boat is lacking safety gear etc or not built for off-shore.

[GrahamHO]

Originally Posted by royelliot

Hey team,

I have decided to sell my house after living in the UK for the last 5 years and head out into the pacific for the next season. I have been looking around at other threads to unpick what might be the best option for me..

- I have both NZ and British Passports
- I would like to buy a blue water yacht in NZ and sail off into the pacific
- I don't know where I want to put roots down at all yet - unlikely to be NZ
- I suspect I will look at selling in Australia (maybe... but if I can convince the wife maybe I will end up further round! But likely Oz)

Would appreciate advice from those that know about GST/Duty about what the most money 'efficient' way of doing this is.

If I buy a boat that hasn't been 'imported' and is flagged elsewhere are there tax implications in the country where the ship is registered? (i.e. if I purchased a Dutch or British flagged boat do I end up paying something in those countries and nothing in NZ?) Or do I bring a briefcase of cash to the pub and settle it over a beer and handshake? If I am in New Zealand and I want to buy a boat do I need to ensure it is imported? Are there advantages of buying a NZ boat and registering it in the UK as I also have one of those passports?

As I am heading offshore, I will be looking as a top priority at something that has or is close to CAT1 (for my own piece of mind). I understand that there are regulations in NZ about requirements for CAT1, is this another good reason (to avoid bureaucracy) to look at registering elsewhere?

Thanks massively in advance. I have just joined what looks to be an excellent forum and any help will be appreciated.

I can't be absolutely specific about what you want to do, but my small business is GST registered and I do returns every 2 months. Firstly the rate of GST in NZ is 15% and it is meant to be displayed at the point of sale. However companies that normally sell their services to other businesses typically display "prices less GST". Secondhand goods don't incur GST but if you were buying and selling as a business ( say secondhand houses) you would be obliged to be registered and make a GST return. A business GST return shows GST collected verses GST paid on goods and services and the business pays the difference or collects a refund if they have paid more than collected. This is so that GST doesn't compound down the chain of supply.


So if I were to sell you my secondhand yacht (as building yachts is not my business) there would be no GST involved being secondhand goods. If you bought my yacht through a yacht broker, their commission would attract GST and that should be confirmed during any negotiations. However the vendor (me in this case) would be paying the commission and any GST that fee attracts.


If you were having a yacht built, every component that is supplied will attract GST as will the builders labor charges. That of course should be confirmed during negotiations.


If you were to go to say a Beneteau importer / supplier and ask for a new yacht the price quoted should! include GST. That too should be confirmed so you don't get a nasty surprise. It is normally required that prices should be displayed as "including" or "not including".


All of which means that if you buy a secondhand yacht in NZ you shouldn't have to pay GST. But if you decided to put a new engine in it that would incur GST as would an installers charges.


There are many fine yachts available in NZ especially in Auckland. The marina where I keep my yacht has something between 1500 and 2000 berths as I recall.
There are 7 marinas within about a 20 km radius of the Auckland CBD, and many other marinas around the country. There are world class marine services and supplies available especially in Auckland. Last time I checked, the exchange rate was NZ$1=US$0.65 cents
Please use this advice as a guide only.
I can't advise you about the import duty a vessel might incur if you take it back home.

[rosatte]

Dam gst is all over the world hell thought it was only a canadian thing as we r almost taxed to death here....come to think about it u pay taxs on a grave plot..

[GrahamHO]

As far as CAT 1 requirements are concerned departing NZ, I can't be absolutely specific, but small vessels departing for overseas are required to be up to a certain standard before they depart. I understand there is a "ten minute" form to fill in.

There can be fairly wild conditions around NZ and in the past inadequately prepared yachts have gone missing. It costs a lot of money to put a P3 Orion up to go searching, and that is what will happen if necessary. You won't however get the bill. Only a few years ago I was on board a NZ Airforce Orion searching the South Pacific Ocean overnight for 6 hours, for a fishing boat missing from Fiji. Eventually it was decided that the Fiji authorities had made a mistake with a single digit in the coordinates and the vessel was found by another aircraft at a location suggested by our aircraft. The longitude was correct but the latitude had an error.

[GrahamHO]

Originally Posted by rosatte

Dam gst is all over the world hell thought it was only a canadian thing as we r almost taxed to death here....come to think about it u pay taxs on a grave plot..

At least in NZ the prices displayed in a shop have to include GST. In Canada you buy something displayed as $10 and they charge you $12 or so. When GST was introduced in NZ around 1985, our rate of income tax was drastically reduced and high duty on imported goods was abolished, being replaced with the uniform GST, and I felt we were better off.
I'm not going to worry about the GST charge for my eventual funeral. If I'm told I have only a month to live I hope to point my yacht offshore without getting clearance and sail into the sunrise.

[El Pinguino]

Originally Posted by GrahamHO

At least in NZ the prices displayed in a shop have to include GST. In Canada you buy something displayed as $10 and they charge you $12 or so. When GST was introduced in NZ around 1985, our rate of income tax was drastically reduced and high duty on imported goods was abolished, being replaced with the uniform GST, and I felt we were better off.
I'm not going to worry about the GST charge for my eventual funeral. If I'm told I have only a month to live I hope to point my yacht offshore without getting clearance and sail into the sunrise.

Thread drift alert....... they brought in GST in Oz just before I retired so after paying income tax all my working life I joined the ranks of the aged rural poor and found myself still getting taxed every time I blinked.....and the new Oz PM wants to up it to 15%.

[rosatte]

Actually in canada its called hst they combined pst and gst and now we have hst 13 % what a deal...

[GrahamHO]

Originally Posted by rosatte

Actually in canada its called hst they combined pst and gst and now we have hst 13 % what a deal...

Yes I've contributed to the Canadian tax take having traveled there every year or 2 for the last 15 years. I still don't understand how it works though.

[Xpress]

Lots of good advice, particularly from GrahamHO. You can check online for requirements around the Pacific for visiting yachts because they vary between independent island states and French territories. From memory, if you own and sail offshore in a foreign registered boat for more than two years the import duty on return to NZ is nixed.
If you buy in NZ (and it's a buyer's market with a lot of well-found offshore boats), to get clearance to leave in a NZ-reg boat you need a Category 1 certificate, as others have mentioned.
A category 1 surveyor will check the scantlings and hull build and rig for strength. Apart from the structural strength he or she may require modifications to things like large windows or cockpit drainage. Safety requirements include HF radio, suitable pumps, flare packs, Epirb, liferaft. Without structural changes, the cost of extra safety requirements might be about $20,000 on a boat fitted only for coastal waters. A Cat1 cert is only valid for each departure from NZ. However there are a lot of boats on the market which have cruised Pacific waters and may only need liferaft and flares updated for a new certificate.
It all seems a bit "nanny-statish" as a Canadian friend says, but the NZ Navy and Air Force (the taxpayer) conduct searches for lost vessels every year. They have a huge area of responsibility in the Southern Ocean and Pacific, and even search for lost fishermen or navigators in a sweep from Tonga to Fiji and the Cooks.
Good luck. May meet in a Pacific anchorage sometime.

[royelliot]

Wow; firstly I want to say a massive thanks to everyone for taking the time to help. I am literally astounded and excited that I am joining this community.

In terms of the CAT 1 this is sort of a red herring by the sounds of it as I am fully intending as others have suggested to get a boat that has been offshore and is CAT1. I completely agree with what others have pointed out about S&R and do not want to skimp myself; more my question was more aimed at advantages of registering elsewhere so the yacht is more attractive to purchase when I sell.

Spot on advice with the GST - that has put my mind to rest there.

I feel less clear on the importing bit - my wife is only british and I could enter NZ on my british passport on visiter visa so could likely avoid the Kiwi card needed to be played.

Perhaps an example as I recently looked at a Dutch yacht and it has just arrived in NZ. It is $200k, sounds like GST can be avoided. But could anyone hazard a guess at what the cost would be 'all in'? Using numbers may help me (I can be slow and I am very very new to this!)

Again, can't tell you how much I appreciate and respect the responses, you are all top in my book.

[Xpress]

Not so straightforward. If the Dutch yacht has not been imported, i.e is in the country temporarily (cruising Permit) it is still liable for both gst and import duty if you buy it and don't leave. The owner may also have entered a bond not to sell in NZ and have to declare if he does, at which point gst and duty would be payable.
Your dual citizenship also may not allow you to avoid the taxes by claiming to be one or other. (Entering the country on your British passport would require a visitor's permit, at which point †he Immigration computer would flick up your NZ citizenship or country of birth).
If you buy and leave to cruise for a couple of years you will have to comply with the visiting permit requirements of the other countries--at which point ownership of a Dutch registered boat by a foreign national may become an issue. That aside, if you cruised for a couple of years then came back to NZ (Australia probably similar) as a citizen returning with goods you have owned for those years you would not be liable.
You can really only sort these grey areas by fronting Customs and getting answers on specific facts, or take the risk of being tripped up.
There are also grey areas in the need for category 1 clearance on a foreign-registered vessel if you are a NZ citizen as its owner.

[El Pinguino]

While I agree re using a British passport when you have an NZ one will lead to tears I would query the statement that if you have owned a yacht for two years you can bring it into NZ duty and GST free. If that was the case we would all be doing it.

I would be checking with customs what the deal is when a foreign flag temporary imported yacht is sold while in NZ. I'm sure more than a few on CF have experience in this regard.

I don't think there is a problem with the skipper having a different nationality to the ship's flag... I mix and match depending on where I am. I'm British in Polynesia and Australian in NZ. It may, however, be an issue when re-registering the yacht in Holland in a non dutch national's name.