Buying a Yacht FAQs
Is it best to use a broker when buying a yacht?
Buying a yacht can be a complicated process and as such a broker can make the entire experience much more streamlined and straightforward for you. Brokers do this for a living, and an experienced broker will have the knowledge and understanding of the market, as well as an extensive contacts list. They will be able to provide you with a list of yachts which fit the criteria you’re looking for, and arrange for everything from initial viewings all the way through to signing the contract. They can advise on financing, class and compliance, surveys, management companies and much more.
Who is responsible for paying the yacht broker?
Brokers receive a commission from the selling party, and there are no costs incurred by the buyers. Several different brokers will all be attempting to sell a yacht, however only one party will be formally instructed to do so by the seller.
How long does it take to purchase a yacht?
The longest part of purchasing a yacht is usually finding the right one for you. Your broker will be able to advise on types of yachts and set up viewings as soon as they understand what will fit your requirements. Once you’ve made your choice, it is then a matter of getting surveys and inspections done, submitting a formal Letter of Intent (LOI) and arranging financing, and you can expect this process to take around six to eight weeks.
Are surveys and sea trials compulsory?
While surveys and sea trials are not compulsory, they are a standard part of the purchase process and we strongly recommend getting them done. It provides an important overview of the condition of the yacht, and some finance institutions may insist upon them too. TJB Super Yachts work with some of the best independent surveyors and engineers in the business and, so as avoid any conflict of interest, we will guide to their services. To this end you will have a fully independent professional survey detailing the condition of the yacht as part of the MOA process. Memorandum of Agreement.
How much does a yacht cost to run each year?
The overall running costs will vary depending on the size, build, age and condition of the yacht, as well as the owner’s usage i.e. whether an owner is using the yacht for one or two seasons, and whether they have a full, flexible or rotational crew. Your broker can help you calculate average running costs of a given yacht based on maintenance, crew, cruising destinations, berthing, fuel and supplies.
Do I pay Value Added Tax (VAT) on a yacht?
The topic of VAT can be complex, and depends upon where your yacht is to be kept. Our brokers can put you in contact with specialist maritime VAT lawyers who will look into all the factors and advise you accordingly.
Why are some yachts “not for sale to US residents while in US waters”?
This is a common stipulation on many yachts being advertised for sale in the United States, based on the US having strict duty regulations. It states that US citizens cannot purchase a non-USA built vessel which has never paid USA Customs duty, or a USA built yacht which has been exported and flies a foreign flag, until they have made a formal entry into the USA and paid duty. US duty is 1.5% of the appraisal value and is charged once. After that time, a vessel can be sold to a US resident in US waters.
How much does insurance cost?
As with all insurance premiums, several factors will affect how much you pay for insuring your superyacht. The size of the yacht, the age, the value of the vessel, the use of the vessel (charter or private use), the equipment on board, the cruising grounds and many other criteria will affect the insurance premium. Your broker can direct you to the most reputable maritime insurance companies where you can easily obtain a quote.
Will my yacht be covered by a warranty?
Warranties are offered by manufacturers for a set amount of time on a new-build yacht, and so if the yacht you are purchasing is still within its warranty period it will be transferred to you as the new owner. However, most brokerage yachts are purchased based on the condition and findings of the professional pre-purchase survey and are therefore do not have warranties.
What paperwork will I receive after purchasing a yacht?
As well as the MOA, which sets out the terms and conditions of the sale, you will also receive the Bill of Sale which records the transfer of legal title from the buyer to the seller, and the Protocol of Delivery and Acceptance which specifies the agreed upon time and date of transfer of ownership and funds.
How is the governing law decided?
The buyer and seller will decide together which country will govern the purchasing process, and this is often a country where neither reside. It is common for England’s law to be chosen.