Buying in the USA and transferring to Europe

[ska_mna]

Hi all,

I'm sure this will have probably been answered on the forums somewhere already, but... I was wondering if anyone has had any experience or has any comments on buying a yacht in the States and then transferring it to Europe. I'm actually UK based, and can't help noticing that prices in the States are considerably less than they are in the UK. They are cheaper than most med countries too. I would want to be cruising around UK/Europe waters mainly. Any comments on;

1) Transferring the yacht. I would be willing to crew, but would need a skipper as I think the Atlantic would be a bit much for me at the moment...! Prices? Considerations?

2) Tax.

3) Anything else I should be aware of buying in the USA and transferring to the UK.

Thanks guys.

 

[Saguday]

You need to consider (in no particular order):

- CE conformance
- RCD compliance
- Import duty payable
- VAT payable
- Delivery

There have been a number of threads on this in the past, just search the forum.

Basically it gets very complicated very quickly because of the CE/RCD angle unless you buy a new US yacht which has this already (but it therefore won't necessarily be so cheap). If it isn't compliant already it could cost a large amount to make it so, depending on what level of CE standard you are looking for - unless you don't care and are happy to have a Cat D boat. You will also pay a large chunk extra on VAT and duty, so budget an extra 20% unless you sail her over via the Azores or sumfink.

There are some beautiful boats over there but getting them here is hideously complex as a general rule. There are some people who specialise in importing US boats and sorting a lot of this out for you but I have no personal experience of them.

We have a US boat but we lived there for several years and she qualifies as a personal possession upon returning to Europe, so tax exempt provided we don;t sell her for a year after importation. She is also CE Cat A so the only issue is RCD compliance - on our boat this boils down to a) changing from 120 to 240V electrics (or supporting both, which would be handy anyway) and b) swapping the way the hatches are hinged (honestly, I ask you).

US boats are cheaper in Florida, for example, but they take a lot of wear and tear down there (very strong UV) compared to boats further up the East Coast. Also be very careful of boats that look too cheap to be true, they are likely to be hurricane damaged. You need a good broker to help you over there.

If you do manage to fight your way through all this then you have to get her back here so you can pay all that tax. Delivery skipper etc could cost you £5-6k plus everything else you need to set the boat up for a 3-4 week Atlantic trip. Alternatively Dockwise and other companies can carry her over on board a ship, budget £7-8k-ish for a 38 footer or thereabouts.

An alternative is to buy a boat over there and leave her there, sailing around the local area. The Chesapeake is wonderful and I know at least one forum member who keeps his boat there (as is ours at the moment). Sailing infrastructure is extensive all along the East Coast and there is a very large area to explore - the Chesapeake is sort of like the Blackwater estuary but 300 miles long instead of 13. With no tides. And warmer. But it does have watersnakes, jellyfish and mosquitos and the beer isn't so good but the crabcakes are brilliant. It is cheaper too - you could pay for a few transatlantic flights each year with the money you save on marina fees compared to the UK...

It's a big subject, I'm sure plenty of others will chip in or point you to the right thread.

 

[santeana]

Just a small qualification to Kioni's constructive note in which he correctly states: "Basically it gets very complicated very quickly because of the CE/RCD angle unless you buy a new US yacht which has this already". Be careful not to assume that a US builder who supplies to Europe builds ALL his boats to comply with CE/RCD. This is likely to apply only to new builds for EU customers/distributors. Boats from the same builder for the US home market will generally not conform to CE.

 

[ska_mna]

Thanks for the useful and quick replies guys, most appreciated. If it's too much hassle, it's probably not worth it. There are still some good prices around Europe which would be less hassle I believe. Incidentally, are there any UK owners here who have any opinions on where the best place is to buy?

 

[testmonkey]

there are many full service agents that will take care of all the paperwork and logistics. Using an agent does bear a cost, but end result may still be significantly cheaper than buying from Europe. The agent will confirm CE, RCD compliance, arrange shipping/delivery, customs etc. Don't want to advertise any particular agent here but there are plenty to choose from. Basically you can just surf yachtworld.com, and when you find a suitable candidate the agent can handle the rest.

 

[PeterGibbs]

2 points to add to the learned posts above:


1. USA purchase. Freighting over is likely to be your best bet. Prepping a domestic boat for an Atlantic crossing would involve lots of expenditure on safety, radios etc that would serve no real purpose back in Europe. There are good specialists - pm me if you want more.

RCD could be an issue when you come to sell - perhaps. It is not a requirement of any authority you are likely to run into when using your imported boat over here. VAT is, and would have to be negotiated with the authority of first landing - and would include a charge for all that trans-Atlantic gear you've put on board too!

Remember, when you buy pre-used in the USA you have sales tax in the price. If you buy new and export direct you can reclaim that - could pay for a good chunk of the transport!

It's a viable plan because UK importers are not likely to reflect the current low rate of the $ when quoting you a landed price - they've taken the exchange gains themselves, haven't they?

2. If you decide against importing, you could do a lot worse than hunt the yards in Holland. You might not get a boat for a junk price, but brokers there normally take more responsibility for what they sell, vs UK brokers, and will not take on boats that are clapped or known to be in need of lots of work. So end to end, you might get a better deal this way.

Good hunting!

PWG

 

[NickiCrutchfield]

If you buy an EU built boat in the US, irrespective of age, you will not have RCD problems as it is classed as a re-import. Any non-EU built boats, regardless of age, are required to have RCD conformance as part of customs clearance BEFORE the boat will be released if you have shipped the boat over as deck cargo. Much better to have it delivered or bring her back yourself, as you then have 6 months (check this) before you either have to leave EU waters or pay the VAT.
I do not go with a previous post saying that the safety equipment required for a transat is a waste of money, as all bits are far cheaper in the US. Example. I was quoted, in jan 2007, $1200 to replace the standing rigging, including bottlescrews, on an Ericson 35. You would pay that in £s here The balance is a liferaft or an EPIRB. The down side is time as it requires much more if you have to go out a few times to sort out the boat.
I was quoted about $8500 for shipping which included a cradle, but not VAT or import duty.
I have to say that in the end I did not buy the boat, but that was purely for other reasons. I would not hesitate to buy from the US if the maths made sense.
Nicki

 

[Saguday]

[ QUOTE ]

....

Remember, when you buy pre-used in the USA you have sales tax in the price. If you buy new and export direct you can reclaim that - could pay for a good chunk of the transport!

...

PWG

[/ QUOTE ]

Not strictly correct:

1. If you buy secondhand but remove the boat from local waters within a certain time period i.e. move it out of state, you are exempt from the state sales tax.

2. If you buy in Delaware or Rhodel Isalnd (as two examples) there is either no sales tax or no sales tax on boats.

Worth checking this out as for states where they do have sales tax on boats the grace period to move the boat out to another state (or overseas) varies.

Neil

 

[Saguday]

[ QUOTE ]
Just a small qualification to Kioni's constructive note in which he correctly states: "Basically it gets very complicated very quickly because of the CE/RCD angle unless you buy a new US yacht which has this already". Be careful not to assume that a US builder who supplies to Europe builds ALL his boats to comply with CE/RCD. This is likely to apply only to new builds for EU customers/distributors. Boats from the same builder for the US home market will generally not conform to CE.

[/ QUOTE ]

Yes, thanks, good point.

We bought an Island Packet, one of the few US builders who do build all their boats to CE Cat A. The only differences for the local market are the hatches (forward opening for ventilation) and mains electrics (obviously 120V) which are easily changed.

I'm not suggesting IP's are the only choice (although we do like ours very much) but note that IP's older than 1997 will not be CE compliant and you'd have to go through all that RCD compliance testing rigmarole at potentially great expense. We looked at some beautiful older secondhand boats at very good prices (one IP32 was an absolute gem) but went for a newer one for just this reason.

 

[PeterGibbs]

Neil,

Tax: I was referring to original sales tax when purchasing a used boat in the USA - same principle as buying a VAT paid used boat here.

You are quite right that tax take is different in different states: my comment was a general one. If our man goes ahead with his USA purchase he will soon discover these things.

Low/zero sales tax - I believe that Alaska is one of those generous states - but how practical?

"Rhodel Isalnd" - very poetic transliteration...you are an artist too!

Peter Gibbs

 

[PeterGibbs]

Nicki,

Quote 1: Any non-EU built boats, regardless of age, are required to have RCD conformance as part of customs clearance BEFORE the boat will be released if you have shipped the boat over as deck cargo.

Can you give me your source for this statement?

Quote 2: I do not go with a previous post saying that the safety equipment required for a transat is a waste of money, as all bits are far cheaper in the US.

As you know, USA spec radios etc are non-compliant in the EU - dump. Full trans-Atlantic gear plus the cost of flying out and hiring 1 or more professional crew (cited in this case), customs clearance etc etc. doesn't add up.

As you say, the maths is against importing.

PWG

 

[Saguday]

Peter, they charge sales tax on every purchase, not just once the first time on a new boat like here. It's a smaller amount than VAT e.g. 5% in Maryland or 6% in NJ, but over several resales it mounts up nicely. If you leave the boat in the state you will have to pay the state tax, even on a secondhand boat.

Some states have become extremely diligent about collecting this tax on boats and there have been some legal cases where their enthusiasm was finally challenged. Even if you visit from out of state you can only stay for a certain length of time before they try and get you for tax.

One quite wealthy guy needed some work done on his MOBO in Annapolis and it took longer than 30 days (boat out of water and unable to move) so they nailed him for 5% tax - on a $2M boat! Needless to say he took it to court - can't remember if he won.

And Rhodel Isalnd is a fine place I'll have you know but I challenge you to find it on a chart...

 

[NickiCrutchfield]

Peter,
The source was very hard to pin down, but after exhaustive research, it became apparent that if the boat has been imported here as deck cargo then it needed, or could need, to comply with all regulations, RCD being one of them. This information came as a result of ringing the RYA, Customs and Excise and eventually an informal conversation with a specialist boat importing marine surveyor. The surveyor in question was found on the internet and knew that I was in no way a prospective customer. The most salient piece of information I found out came from that most evasive of sources, C&E, which was that the pre RCD get out clause for boats built before 1998 (if memory serves it's 1998) does not apply to imported boats which are subject to any legislation at the time of import.
With regard to your second question about safety gear, I would say only this. Buy a UK VHF here for about £150. Take it with you as hand luggage and install. A life raft is a life raft as is an EPIRB. What are the other pieces of safety gear which don't conform? Also what would you consider to be 'Full trans-Atlantic gear'?
I never got as far as customs clearance from the US. How much does that cost?
One last point; I definitely did not say that the maths are against importing, just that I would not hesitate if the maths made sense.
Nicki

 

[PeterGibbs]

Neil,

You are of course right.

When I went to Harvard in 1974 I was summoned (as a student) to the local immigration office and bound over to appear every week for the months until I left the States. (I leave you to guess how well I complied with this...!)
I formed then a view about USA bureaucracy, and am confident it has become ever more oppressive.

Yet another reason to purchase over here - before we attain the same level of stifflement - my answer to your Phode Island paradox! (?paradise)

All the best,

Peter

 

[PeterGibbs]

Nicki,

Thanks for this. The clarity of the situation is as I thought.

Just wanted to finally share one guiding insight. There are innumerable piece of legislation affecting boats, imports and the rest of it. As you know. When you sail to Holland you have to carry Dutch regulations (only obtainable in Dutch) or face a fine, tune your radio to new frequencies as you pass from one (numerous) control zone to another, always have the original bill of sale on board, ensure your gas fittings are approved by a Corgi registered fitter (marine) You see my point. Sometimes it's necessary, I have found, to take a view.

In the case of importing from the States, I think the advantages have to be well stacked up in its favour to cover the true end to end costs of bringing in goods from a highly bureaucratic environment to a heavily protected economy like the EU. We may disagree over the words, but in terms of helping the original questioner, it seems right to point up the issues and indicate the likely outcome. That's no doubt why so few private imports are actually made.

Peter

 

[NickiCrutchfield]

Peter,
You are right. A view is very important.
I think therefore, my answer to the original question would be: yes do it, but be very careful indeed and the maths will probably only work in a scenario where you go out once, refit the boat and sail her back alone or with a friend in order to minimize costs.
Regards,
Nicki

 

[santeana]

Nicki - OR (to quote LadyJessie from Liveaboard); you can import a boat "tax-free if you move into the EU from a non-EU country, provided you can show non-EU residency of more than 12 months and ownership of more than six months."

Food for thought if your circumstances permit. Guess CE/RCD is still problematic but.... hey, surely we can't expect it to be sooo easy!

 

[Saguday]

[ QUOTE ]
Nicki - OR (to quote LadyJessie from Liveaboard); you can import a boat "tax-free if you move into the EU from a non-EU country, provided you can show non-EU residency of more than 12 months and ownership of more than six months."
...


[/ QUOTE ]

This was precisely our circumstances, although I didn't cover this point as this was not where the original question was coming from.

Besides being resident overseas for at least 12 months and owning the boat for 6 months before returning you are also restricted from selling in the first 12 months after importation otherwise tax and duty become due (obvious really, to stop people turning it into a business). We thought this was reasonable and went ahead with our Big Plan, buying a boat we thought would need the least effort on the CE/RCD side when we eventually returned.

 

[santeana]

Kioni - glad you piped-up as I'd guessed you'd done something like that. We've given ska_mna some good feedback so I hope he'll forgive this slight deviation from his topic. Kioni, when going thro' the 12/6 months qualification for VAT exemption outside EU do you know if it is:
1. ok to maintain an address in UK/EU?
2. unnecessary to have an address outside EU provided you can prove liveaboard status for the qualifying term, at least?
Thanks.

 

[ska_mna]

Wow, thanks for the indepth replies guys; PeterGibbs, Kioni, Nicki_Crutchfield, RonR, testmonkey. Most appreciated. I'll go through all the things you mention and do some background reading...! Do you think it would be fair to say that it would only start to become cost effective on a boat with a higher purchase cost (a % saving on initial cost?). i.e. if I spend ~$50k on the boat, it's probably not worth it, whereas for a $100k boat it might start to make more sense, roughly speaking?