Story by Andrew Holland / June 19, 2017
Written by Andrew Holland
As you are browsing through listings of potential catamarans to consider while you are online shopping, you may keep recognizing a familiar phrase for boats for sale that have you interested. Directly at the top of the listing you are looking at is a bolded “Not For Sale In US Waters To A US Resident”, but what does this really mean? As a US Citizen are you not able to buy the boat?
The language “Not For Sale In US Waters To A US Resident” must legally be added to listings for non-US Registered boats that are in US Waters under a cruising permit and placed for sale by the owner. As the current owner of the boat has not paid the US Import Duty on the boat, a sale cannot legally occur on the boat to a US Resident while she is in US Waters, and a broker cannot legally advertise the boat without making prominently clear that the boat is “Not For Sale In US Waters To A US Resident”.
Does this mean that a US Citizen cannot purchase the boat? No, not necessarily..
There are several ways a sale could occur on the boat you are looking at as a US Citizen. The first and preferred way would be for the seller of the boat to purchase a US Customs Entry Bond and pay the US Import Duty due on the boat. Exact rates of the US Import Duty would depend on where the boat was built and can range from .02% to 1.8% of the value of the boat.
The second way would method would be an “Offshore Closing” or a closing that occurs in the Bahamas or somewhere else outside of US Territory that is at least 12 nautical miles off the coast. An “Offshore Closing” transaction does complicate matters slightly as potential buyers for boats that have not been US Duty paid cannot board or view the boat while she is US Waters, so the transaction details must follow a strict protocol that abides by the laws of the United States. This will take the coordination and expertise of your broker for a transaction to be completed properly.
Many foreign flagged boats decide to delay paying the US duty on the boat while she is being marketed for sale in US Waters as to potentially sell the boat to another non-US citizen who can purchase the boat in US Waters without the owner having to pay the US duty prior to the sale.
Now, the Florida Yacht Brokers Association is proposing a change to the US law to allow owners of used foreign flagged boats in US waters with a valid cruising license to offer them for sale to US residents while in US waters, without paying duty, but to date this change has not been made. If and when these changes are made, this article will be updated to reflect the updated laws.
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I cannot speak too highly of Andrew Hodgdon and his colleagues at the Multihull Company.
The process of selling my boat was very smooth and well managed and with excellent communication – especially important as I was unable to be nearby during the sale process. Andrew’s deep knowledge of the market and my boat was very reassuring. We spoke regularly and he kept me closely advised all the way through to a happy sale. I found him a good guy, very helpful, willing to share and bounce ideas around, and I enjoyed working with him. Highly recommended!
Andrew Hodgdon and The Multihull Company are really professional! I just closed a deal with them, and everything was pretty smooth. Andrew was punctual, showed a lot of expertise, and he was honest about all the problems with the boat. He is also giving me the support I need to run all the projects on this boat. This whole process was much better than I was expecting, and I recommend this team! Thank you, Andrew.
The multihull company, specifically Andrew Hodgson worked with me in the sale of Gods Grace, a 50’ Voyage 500. They made sure that as many people as possible touched it, laid hands on it, ultimately resulting in a offer and sale and was extremely helpful in the prep and sale process as I did not live locally… If you want to make sure that people actually see your vessel, will be honest and truly assist you in the sale, Andrew is the man for the job.
Andrew Hodgdon always goes above and beyond. After several transactions I wouldn’t work with anyone else in the industry.
Andrew at the Multihull Company was our buyer’s broker and he was excellent to work with. He thoroughly explained the purchase process, and helped with many questions along the way. We would definitely use Andrew and Multihull again to buy and sell catamarans and yachts.
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