More Canadian Questions

[Download7]

Long time lurker first time poster. We are pretty young Canadians looking at buying a boat on the west coast of the states and I'm just trying to save a few bucks.

From what I've read I only need to pay the Canadian Tax once I bring it into Canadian waters, but that is something we want to do as we want to start out with mostly local trips and learn the boats ins and outs and get it ready for the south pacific or more depending on cash and how much fun we're having.

I've read the recent threads about Canadians buying boats in the Caribbean but I didn't find the answers I was looking for. The way I see it is we have 2 options and it's the second one that has too many unknowns for me.

Option A:

Motor it up to Vancouver (where we live) and register it upon entry and pay taxes (12%) which could be up to 9k for our price range. (Motoring up because we are not ready for going to Hawaii and back)

Option B:

Put the boat in my GFs name who is Dual citizen and leave it registered in the US. (I am assuming that I can not register a boat in the US as a canadian citizen)

What would I be paying to do that in the states? Cali or Washington tax? 5%?

Does she have to have a residence down there?

She is fearful that they will come after her for income-tax like they are a lot of other Americans not working or living in America, does anyone have experience with this?

How long can we have a US registered boat in canada before we have to leave to reset the clock, how long do we have to leave for?

Any other expenses that I missed?

Thank you in advance for any insight you can provide.





I've been keeping my eye on an Endeavour 42 and a Nelson-Marek 445 but really anything with an aft cabin with a centerline berth catches my attention if it has at least a 'sail area/disp.' of 15 or higher

[Jd1]

Originally Posted by Download7

Any other expenses that I missed?

If the boat was not NAFTA manufactured and you bring it into Canada you are looking at an additional 9.5% duty. I assume taxes are on the duty paid price so taxes go up a smitch as well.

[Download7]

Originally Posted by Jd1

If the boat was not NAFTA manufactured and you bring it into Canada you are looking at an additional 9.5% duty. I assume taxes are on the duty paid price so taxes go up a smitch as well.

Oh Man they really know how to ding you, Thanks for the heads up.

[Calif.Ted]

Boats are titled in one of 2 ways here, documented by CG which requires you to be US citizen, or registered by the state Department of Motor Vehicles which can be held by Canadian citizen. California will require "use" tax at same rate as "sales" tax for the county it is purchased in, about 10%. Payable at time you transfer title at DMV or for documented vessels you are responsible to pay to the Franchise Tax Board (State tax agency).

[Download7]

Originally Posted by Calif.Ted

Boats are titled in one of 2 ways here, documented by CG which requires you to be US citizen, or registered by the state Department of Motor Vehicles which can be held by Canadian citizen. California will require "use" tax at same rate as "sales" tax for the county it is purchased in, about 10%. Payable at time you transfer title at DMV or for documented vessels you are responsible to pay to the Franchise Tax Board (State tax agency).

So I just want to make sure I read that right, If I put the boat in my GFs name and register with the coast guard I still have to pay about 10% tax to the Franchise Tax Board? So it's not a money saver to keep it registered in the states then... bummer

Thank you so much for your help

[Stu Jackson]

Noodle around this site

Visitor Information - Transport Canada

There's visitor information and limits on stays, too.

[Download7]

Originally Posted by Stu Jackson

Noodle around this site

Visitor Information - Transport Canada

There's visitor information and limits on stays, too.

Awesome Thank you

[GordMay]

Greetings and welcome aboard the CF, Download.

[Mike OReilly]

Originally Posted by Download7

Long time lurker first time poster. We are pretty young Canadians looking at buying a boat on the west coast of the states and I'm just trying to save a few bucks.

I have to say, given the recent release of the Paradise Papers, this posting is kinda ironic or amusing. Seems like you’re looking to use a loophole to avoid legitimate tax. But whatever...

Originally Posted by Download7

She is fearful that they will come after her for income-tax like they are a lot of other Americans not working or living in America, does anyone have experience with this?

Personally, I would consult a lawyer specializing in this area. I have a good friend who has been fending of Uncle Sam’s tax over-reach for years now. It’s been a major emotional and financial drain. I’d certainly suspect that registering a boat down there would indicated some level of residence, which could very well trigger greater likelihood of insuring the wrath of the IRS.

[Charlie]

Originally Posted by Download7

So I just want to make sure I read that right, If I put the boat in my GFs name and register with the coast guard I still have to pay about 10% tax to the Franchise Tax Board? So it's not a money saver to keep it registered in the states then... bummer

Thank you so much for your help

The 10% only applies if you register it in California. Oregon has no sales tax and you can register it there. I don't know what the WA state tax is but it should be easy to find with a google search. I live in CA. I bought a boat in Canada and the plan was to sail it south and turn left at the canal. I registered it in MT. I met all the requirements. I did not have to pay $20k in taxes. I'm not sure it was worth it. We sailed as far North as Desolation Sound and as far south as La Paz. The hassle factor was tremendous.

[fxykty]

Typically registration and import duties are two separate things. Import duties are based on owner residence, so unless you can prove your GF is resident outside of Canada, you will need to import the boat into Canada and pay the taxes, regardless of whether the boat is registered in Canada, a US state, Jersey, Malaysia or anywhere else.

If you’re not planning on going international for a few years, you could just license in Canada then consider registration later.

And regarding giving the boat ownership to your GF, how sure are you that the relationship will last? I would ask the same question if you were married. If things go wrong, at best you would get only 50% ownership in relationship property.

As for bringing the boat up the West Coast, don’t even think about it if you’re not prepared to go via Hawaii. That coast has no safe harbours (without bars) between San Francisco and Vancouver Island, so should be treated as an offshore passage. Study the currents and winds and understand why the sailing route is via Hawaii.

You can hire a professional delivery skipper and go with him or her - an invaluable experience and fastest way to learn your boat and some seamanship.

[B25Matt]

Find a lawyer who will do a “high seas” sale. You motor out into international waters with today’s news paper and a hand held GPS and photograph showing the front page (ie. date), lat/lon, seller and purchaser.

It won’t get you out of all the taxes and duties but some of them.

[groundtackle]

I imported my boat from the US. Contact Marine Documentation Services in Anacortes and they'll help you with the registration.

I used to think my brain was my most important organ then I thought 'wait, who's telling me that?'

Nick

[travellerw]

Originally Posted by B25Matt

Find a lawyer who will do a “high seas” sale. You motor out into international waters with today’s news paper and a hand held GPS and photograph showing the front page (ie. date), lat/lon, seller and purchaser.

It won’t get you out of all the taxes and duties but some of them.

Not true at all for a Canadian boat.. It matters not where the transaction occured, taxes are due when the boat enters Canadian waters (if Canadian registered).. Sailing it offshore with a newspaper will gain you ZERO here!

I have no other answers to your other questions, except are we forgetting GST/PST? The tax may be much higher than you think

[B25Matt]

Originally Posted by travellerw

Not true at all for a Canadian boat.. It matters not where the transaction occured, taxes are due when the boat enters Canadian waters (if Canadian registered).. Sailing it offshore with a newspaper will gain you ZERO here!

I have no other answers to your other questions, except are we forgetting GST/PST? The tax may be much higher than you think

I stand corrected. The situation I was thinking of was of a Canadian selling to another Canadian , the boat was in Florida and with no intention of ever bringing it into Canada.