Buying in the US - registration in Delaware vs NZ

[Wannabe 0]

Recently I've been trying to get my head around the pros/cons/costs/benefits of the registration options when purchasing a boat in the US.

 

I am a New Zealand citizen and plan to buy a ~40' boat in USA.

After purchase, I plan to take a couple of months to fitout in Florida and/or St Martin, and will then sail the Pacific back towards NZ and Australia.

I plan to eventually sell the boat in NZ or Aus – probably Australia.

 

I think that registering the boat in NZ is the most appropriate thing to do. However, there are those that recommend registering elsewhere - namely Delaware, US.

 

The main advantages of a Delaware registration that I can see are:

- Easier to resell in the US if we had to abandon the plan after purchasing.

- If/when we visit NZ, we aren't subject to CAT1 inspection upon departure.

 

The downside is that I'd be obligated to fly a US flag, and the vessel would be under US jurisdiction in any event requiring reference to international law.

 

 

Im certainly not the first to do this... whats the general consensus on registration from the experts?

[Island Time 1,239]

You could always register it in Vanuatu or Malaysia - but as you said, you are then subject to the laws of that country.

 

If you come to NZ in a boat you own, of any flag, you will have to pay GST and duty upon arrival. Usually they take the insured value, or your cost price as the starting point.

 

If it's US registered I understand the rules there are complex - state and national, and a licence to operate? Others probably know this better than me...

[Wannabe 0]

You could always register it in Vanuatu or Malaysia - but as you said, you are then subject to the laws of that country.

 

But why would you?

Just to get around CAT1 inspection?

I plan to be equipped to a CAT1 standard for practical purposes anyway, but I understand there can be a reasonable difference between 'practical purposes' and the finicky details required to get the actual piece of paper.

 

I need to check up on the GST/Duty thing, but last time I looked at it, I believe there was a grace period or something similar. We'd be visiting for the summer, and as long as we actually left again within the grace period, I think we are ok.

[Island Time 1,239]

I totally agree about the Cat 1 issue. Many here don't though. And some of the regs are a bit behind the times.

 

There is NO grace period for a NZ owner bringing a boat into NZ. Foreign vessels visiting with foreign owners/charterers are given an exemption normally, for up to 12 months now I think. You can certainly try, but I know of 2 vessels this year who had to pay on arrival. One because he wanted to sell it in NZ, one because he was Kiwi and owned the (UK reg) vessel. If it were me, I'd get the situation clarified in writing, before coming here if I did not intend to stay (and pay).

 

Good luck with your boat search and voyage!

[Black Panther 1,591]

Also check what happens when you sell a foreign boat in Aus. I don't knowe the details, but I did a delivery from/to Brisbane a couple of years ago as it was cheaper for the US owner to pay me and do the transfer here than in Aus.

 

Otherwise sounds a hell of a good plan to me.

[Wannabe 0]

...and i've even got a missus that's willing and able

 

I've now spoken with a few customs bods, and whilst they also encouraged me to get it in writing, here's the deal.

I can come in on a Commercial Temporary Import Entry.

This requires making some statements about my intent to leave again within a given period.

 

This will attract a 'bond' equivalent to duty & GST (21% of the purchase price).

...said bond would be returned (with interest) when I leave within the stated period - eg. 6 months.

 

This matches my vague recollections of how this is possible.

 

 

Registration - be it NZ or Delaware makes no difference in this respect... or does it?

I suppose if the boat was owned by company-x from Delaware, and I was just the skipper, a domestic TIE (no bond required) may be applicable.

Surely, the transparency through to me as shareholder of said company would create the same net result? Hmm...

[Black Panther 1,591]

I don't think Delaware will work, it is a state thing and US boats travelling offshore need what they call federal documentation (which you can't get without a US passport). So you are stuck with NZ or one of the ones IT mentioned (I'm sussing out Malaysia - seems simple and cheap).

[Wannabe 0]

I think Delaware is viable, i'll post back when I get it confirmed by one of the crowds i've asked up there.

They seem to have ways & means (avoidance not evasion and all that).

Failing that, i look forward to learning more about Malaysia.

 

As far as the cost of selling in Aus vs NZ goes, here's my understanding (open to correction)

NZ: 5% duty + 15% GST = roughly 21% of purchase price. (63k on 300k boat)

GST is charged on the duty (paying tax on tax)

NZ is also a smaller market - especially in my case given the 2 hulls.

 

Aus: 5% duty + 10% GST = roughly 15% of purchase price. (45k on 300k boat)

GST & duty charged separately

Bigger market (for me at least)

More red tape in terms of compliance for gas / electrics / etc. Red tape is different depending on which state, if any, the buyer is from.

[Black Panther 1,591]

My only other comment is $300k seems a hell of a lot for a 40ft boat, why not half that?

 

Also - if you can find a NZ/Aus boat over there and the owners have had enough, buy it and sail it home, duty and GST covered. Plus you'll probably get a good deal as Usan's are very brand conscious and won't buy something they don't recognise.

[Wannabe 0]

Wifey likes to pour her pina colada and rest it on the table while underway, so the boat has two hulls to facilitate this .

 

It will be 7-12 years old and be either a Manta, Leopard, or Privilege.

Cats are expensive - I'm buying at the bottom end of the market, while trying to avoid ex charter.

 

Edit: boat registration in NZ costs about $850.

[tuffyluffy 76]

happy to be corrected, but I thought the NZ duty was less than 5%?

I'd also be surprised if the AU duty was as little as 5%, they have 'luxury' taxes here in AU on allot of things and I wouldn't be surprised if yachts fall in that bracket.

[Black Panther 1,591]

Paperwork is boring, let's go look at boats

 

http://au.yachtworld.com/boats/1993/Ama ... 9G52vmSzxU

 

http://au.yachtworld.com/boats/1991/Pri ... 9G6FvmSzxU

 

http://au.yachtworld.com/boats/1988/Fou ... 9G6XvmSzxU

 

http://au.yachtworld.com/boats/1990/Shu ... 9G6yfmSzxU

[Wannabe 0]

happy to be corrected, but I thought the NZ duty was less than 5%?

I'd also be surprised if the AU duty was as little as 5%, they have 'luxury' taxes here in AU on allot of things and I wouldn't be surprised if yachts fall in that bracket.

My numbers come from NZ and Aus official Customs sources and officials.

http://www.customs.gov.au/site/page4365.asp

http://www.customs.govt.nz/inprivate/charges/boatsandaircraft/Pages/default.aspx

There is some finer details, but the duty and gst figures are correct.

 

Paperwork is boring, let's go look at boats

http://au.yachtworld.com/boats/1993/Ama ... 9G52vmSzxU

http://au.yachtworld.com/boats/1991/Pri ... 9G6FvmSzxU

http://au.yachtworld.com/boats/1988/Fou ... 9G6XvmSzxU

http://au.yachtworld.com/boats/1990/Shu ... 9G6yfmSzxU

Ok, i'll play the thread drift game... it is certainly fun!

I said 7-12 years old.

Those boats are all 21-27 years old.

 

Here's whats up my alley:

2005 Privilege (but with diesels not electric drives):

2007 Leopard 40 (Owners version):

2003 Manta 42 MKII:

 

edit: That 1991 Privilege 482 is a lot of boat and the privilege does age well. Im just trying to avoid maintenance issues... im not exactly the most hands on guy (i know, I know, dont start).

 

OK, enough of this posting posting, i gotta go a rum racin now!

(gusting over 30, so should be fun)

[Black Panther 1,591]

Be a great trip on any of them. A broad generalisation I would look for an ex liveaboard - you'll get lots of extra stuff for pennies on the dollar that you will want to buy at full price later.

 

And if it is in the US get away ASAP, hanging around the US waiting to leave sucks up money, just leave and deal with it.

Actually on that thought, having the reg sorted in advance would help too or you could be sitting around some hell hole like Ft Lauderdale waiting for that.

[1paulg 17]

My understanding is that if the boat is offshore registered (although owner is Kiwi )you will need to post bond etc as Wannabe has stated -however your final amount of duty and GST is calculated on a depreciated value derived by the time evolved from time (and price ) of purchase to time declared entry. If you are not sure whether the final sale will be in NZ or Aust then probably better to have offshore registered as you could end up paying (or allowing in final sale) for 2 x duty - 1 in each country..

By taking the boat offshore each year the time before you need to finally pay duties can be in some cases extended or prolonged(and therefore depreciation period longer)

Registration in Vanuatu is no longer an option as they discontinued their offshore registry several years ago -unless this has subsequently changed..

Hope that helps...

[Wannabe 0]

Oh hi Paul!

 

Yup, Depreciation is applied as long as you've owned it for at least 3 months and the rate is 10% p.a in NZ.

The customs value is also increased to include the specified costs (or customs calculated costs) of delivering the boat from its purchase location.

 

 

Oh dear, Wifey saw the thread and now she's all excited about that Privilege 482.

I've long believed older boats are not for me due to my distaste for constant maintenance. I would be lying if I said I wasn't tempted though!

[Guest]

Be a great trip on any of them. A broad generalisation I would look for an ex liveaboard - you'll get lots of extra stuff for pennies on the dollar that you will want to buy at full price later.

 

And if it is in the US get away ASAP, hanging around the US waiting to leave sucks up money, just leave and deal with it.

Actually on that thought, having the reg sorted in advance would help too or you could be sitting around some hell hole like Ft Lauderdale waiting for that.

 

It would be a lousy expensive and maintenance sucking trip on them all.

[Bill 0]

Yes, you can register in Delaware if the boat is kept there at the time of purchase. Each of the 50 states has its own registration system; you could just as easily register in Texas or one of the states without a sales tax (very roughly your GST) to the same end. The states I know of don't require citizenship, local or national. The qualifier is where the boat lives on a permanent basis. State registration is not federal documentation. The latter is not available to non-citizens.

 

If you stay in the US, there's no particular disadvantage to state registration. You may transit among any of the states without hindrance or a need to register locally if (a) you have no intention of staying for more than a set period -- usually 30 days -- or ( you are having your boat worked on locally, meaning you'll be leaving your dollars behind. They like that.

 

Federal documentation is usually chosen for larger boats to qualify for a marine mortgage or because it will be used in distant countries, NZ qualifying there. I'm told some countries won't accept state registration from the USA, but I haven't experienced this. Our boat has been to Canada, just 250 kilometers to the north, and as far south as Ecuador (somewhat farther) using state registration without difficulty, but that was pre-9/11 for the latter and might not apply now. Fair warning.

[Guest]

Oh hi Paul!

 

Yup, Depreciation is applied as long as you've owned it for at least 3 months and the rate is 10% p.a in NZ.

The customs value is also increased to include the specified costs (or customs calculated costs) of delivering the boat from its purchase location.

 

 

Oh dear, Wifey saw the thread and now she's all excited about that Privilege 482.

I've long believed older boats are not for me due to my distaste for constant maintenance. I would be lying if I said I wasn't tempted though!

 

Privilege Cats not much bridge deck clearance and slam to windward even with a moderate sea. You will take a hammering going to windward 28 knots plus. Lagoons don't go to windward either.

 

Choose a Cat with at least .900 bridge deck clearance.

 

Some will say what's the hurry. Marina fees and harbour fees.

 

OC

[Guest]

happy to be corrected, but I thought the NZ duty was less than 5%?

I'd also be surprised if the AU duty was as little as 5%, they have 'luxury' taxes here in AU on allot of things and I wouldn't be surprised if yachts fall in that bracket.

My numbers come from NZ and Aus official Customs sources and officials.

http://www.customs.gov.au/site/page4365.asp

http://www.customs.govt.nz/inprivate/charges/boatsandaircraft/Pages/default.aspx

There is some finer details, but the duty and gst figures are correct.

 

Paperwork is boring, let's go look at boats

http://au.yachtworld.com/boats/1993/Ama ... 9G52vmSzxU

http://au.yachtworld.com/boats/1991/Pri ... 9G6FvmSzxU

http://au.yachtworld.com/boats/1988/Fou ... 9G6XvmSzxU

http://au.yachtworld.com/boats/1990/Shu ... 9G6yfmSzxU

Ok, i'll play the thread drift game... it is certainly fun!

I said 7-12 years old.

Those boats are all 21-27 years old.

 

Here's whats up my alley:

2005 Privilege (but with diesels not electric drives):

2007 Leopard 40 (Owners version):

2003 Manta 42 MKII:

 

edit: That 1991 Privilege 482 is a lot of boat and the privilege does age well. Im just trying to avoid maintenance issues... im not exactly the most hands on guy (i know, I know, dont start).

 

OK, enough of this posting posting, i gotta go a rum racin now!

(gusting over 30, so should be fun)

 

 

See

 

http://crew.org.nz/forum/viewtopic.php?f=6&t=24666&start=120