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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We had a great purchasing experience with The Multihull Company. Got us into the boat we really wanted, our broker Josie was amazing, she walked us through the entire process, negotiated the deal we wanted and gave us great advice throughout. If you are looking to purchase a boat we can’t recommend them enough.
It’s been a few weeks now and the dust has settled. We had a great experience with the Multihull Company and in particular our broker, Caroline Laviolette. Caroline was happy to share her knowledge of the market and the catamarans we were interested in purchasing. She was patient and thorough as we looked at several boats in SE Florida, helped us narrow our search and eventually purchase a beautiful 2017 Lagoon 42. Many thanks to the team at The Multihull Company!
We had a great experience purchasing our boat with Will Miller as a buyers agent. Purchasing our first large Cat is a daunting experience and Will was able to walk us through the process with ease. Will was very straight forward and constantly gave us honest feedback as well as finding and pointing out details on all the boats that we may not have noticed or thought about.
We had a great experience and would use them again.
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We have had great experiences with the Multihull company. We both sold our old boat through them, and bought our new boat through them. I have to say that Will Miller is top-notch, and Riley was great as our broker for selling our O day 39. when you buy a Salt or Boat through them, I feel like you are not only clients, but you are friends. The lines of communication were always open and we were always informed of everything going on.
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