Whether you're going to sail the open water, fish your favorite coves or chart a course to your dream retirement, buying a yacht is the adventure of a lifetime. You can find many exceptional values in both new and used yachts. To make sure you get years of pleasure and adventure out of your boat, buy smart. We have compiled a list of frequently asked questions along with a yacht purchasing checklist that we hope you will find helpful below.

Find a dealership that sells the range of boats you think you are interested in.
There are many new boat lines of both power and sail for you to choose from as well as an extensive list of used boats. Having a dealer close to where you live can be a big benefit and save you lots of time.

Choosing your boat.
Choosing a boat is a very personal decision depending on how you wish to use your boat. Sometimes that can be a hard question to ask yourself, but be honest with yourself and you will be that much happier with your purchase. Obviously you wouldn't want to go and buy a racing sailboat if your intention is to cruise the bay with family. Although There lots of types of yachts for sale, you absolutely want to make sure you are getting what you really want.

Choosing the right gear.
Many boats come stock with excellent gear and electronics, but undoubtedly you will want to add an item or two to your new boat. Boat brokers or dealers are professionals and can help you choose what gear best suites your needs and budget, install it for you and teach you how to use it. Most are boaters too and live and love boating. Many have as much fun as you do planning and putting together your new boat. If you can dream it, they usually can install it.

Your Dealer's Service Department
Does your dealer have a certifed staff of sales professionals to install and service your new yacht. Are they licensed, insured and bonded? Do they have mobile dockside service to help you no matter where your boat is? Do they have emergency technicians available 7 days a week? Most can proudly answer "Yes" to all of the above. An award-winning service department are the ones that stand ready to make your boating dream a reality.

So HOW do we BUY the boat? Two Scenarios
There are two different scenarios when it comes time to buy the boat, depending on the location of the boat. Scenario one is that the boat is in stock at the dealer's show docks. Most dealers will require a down payment of 10% to start the purchase process, and "close" the financing with 90% of the purchase price within 10 days. The remaining 10% is due on delivery day.

Scenario two is the boat needs to be ordered from the factory. 20% starts the process and get's the boat ordered. You close on 80% of the purchase price when the boat ships from the factory, and the dealer returns 10% at that time. You pay the final 10% on delivery day. Dealers should not start commissioning and installing equipment until she is 90% funded (after closing).

Can you finance our boat from the dealer?
You can finance most boats over 20 years! It is incredibly easy to finance a boat and most dealers have their our own inhouse financing department to make financing a new boat even easier. There are also tax benefits to owning a boat whether it is a second home or being placed into charter.

So when will she be ready?
If the dealer has to install alot of gear, it can take is 5-8 weeks from the point that she arrives on their docks or yard. (For boats above 50', plan 10 weeks.) Dealers can usually do everything from "building" the rig (sailboats), to commissioning all of the systems, to putting the bottom paint on...to completely detailing her and making her beautiful for delivery day. A good dealers usually take pride in doing it right and want to make her as perfect as possible for you.

Delivery Day!
Then the big day arrives, DELIVERY DAY! The day you have been waiting so anxiously for.You'll go through a thorough "Walk Through" with the Quality Control Manager which will take about 3-8 hours or however long it takes to get you comfortable in your new boat.. They will go over everything from where your thru-hulls are to how to plot a course on the new chartplotter. They should also go over all of your warranty paperwork.

Beyond all of the extra time that a dealers are willing to spend with you teaching you how to enjoy your boat, you should get 8 or so free hours with a licensed CG captain aboard to secure your comfort level. Many dealers give you as much time as you need to get to know the boat.

Now what?
Time to enjoy your new boat. From here, you are in the hands of after sale service department. They should check with you to make sure everything is as it should be and that there is nothing left to do except to enjoy your new boat and go for a cruise! If anything should come up, most good dealers have dockside service locations throughout California with emergency service available 7 days a week.

Possible Tax Benefits to buying a boat. 

1. Will a boat qualify for a second home deduction? 
Yes, if a boat has a place to sleep, a head and a galley it will qualify as a second home deduction.
2.  What does this give me?
You can write off all your interest expenses related to the boat, just as you do your primary residence.
3. What restrictions apply?
  The IRS only entitles you to one 2nd home deduction, so if you already own a home, it might benefit you to finance your boat through the equity in one of your homes

1. Can I write my boat off as a business expense?

Many of our clients do write off their boats through their business; however you would want to meet with your own accountant to insure you followed IRS guidelines. 

1. What advantage does placing a boat in an on going charter company?

There are many tax and cash flow advantages to this technique.

1. You are able to depreciate the boat (10 year accelerated depreciation MACRS)
2. Section 179 expense deduction in the year of acquisition (up to $107,000 in 2007)
3.  You are able to deduct all ordinary and necessary charter related expense (berthing, insurance, maintenance, interest etc.)
4. The boat will receive the care and management by a professional staff (varies with charter company)
5. You receive the income from Charter.
6. You and those that charter your boat will receive good training using the American Sailing Association (ASA) Training Program.
7. You will have the opportunity to dramatically reduce the time it takes to pay off your boat.
8. There will be a dramatic reduction in ownership expenses.
9. There may be an easier access to slips, an increasingly scarce commodity.

What is an Offshore Delivery all about?

Offshore Delivery – California reverts to the 90 day out-of-state rule for yachts & planes with passage of recent state budget

Our guess is that this law will not last long. A new bill changing this law could be passed as early as Christmas...

July 1, 2007 - Owners of yachts, planes or recreational vehicles, will once again be able to obtain a sales tax exemption if they keep those items out of the state for atleast 90 days after purchase. The law has reverted back to pre-2004 status.

A provision intended to keep the one-year requirement in place was removed from the budget last month at the insistence of Senate Republican Leader Dick Ackerman of Irvine. 

Ackerman said in an interview that the stiffer rules were pushing yacht brokers and manufacturers out of the state. The boost in sales tax payments was the result of more Californians buying jet skis and smaller vessels, not yacht owners forgoing that long trip to Mexico, he said.

Gov. Arnold Schwarzenegger has worked with Democrats to keep the one-year requirement in place. It had been renewed each year since it was enacted in 2004 -- until now.

What is an Offshore Delivery?
For many years clients have chosen to take delivery of their boat in a location outside of California, in order to use it in a location outside of California.  One of the advantages of this practice is that the dealership is not required to collect sales or use tax (approximately 8% of the purchase price, depending on the county in which you purchase the boat).  California requires that a retailer collect or a buyer of a brokerage boat pay a sales tax on the purchase. The only exception is when a client requests, and takes delivery outside of the state.  This will keep them from paying the sales tax, but they will be liable for a Use Tax (coincidently the same amount as a sales tax) unless they follow very specific rules and did not “intend” to bring it back or to keep it out for the purpose of avoiding sales/use tax.  Below you will find a list of 8 key summary points to consider and a list of 3 attorneys who specialize in this type of transaction. We highly recommend using an attorney to insure you follow the intent and letter of this tax code. This list is meant as a general guideline and should not be solely relied on to make your decision to take an offshore/ out of state delivery.

• The Purchase contracts (new or brokerage) must state that the offshore delivery as a contingency.
• The purpose is not to avoid sales tax.
• You should not keep your current slips or anything that could be argued that you intend to return to California.
• Buyers must keep the boat out a minimum 90 days.
• The client must keep all records of usage out of the state to verify it has been used not stored. There is no specific usage amount required by the state; however we suggest you use it as much as possible.
• The owner can not use the boat or put equipment on it until he has taken delivery out of the state.
• California Attorney’s who are experts in this tax code and others relating to your boat purchase.

FREQUENTLY ASKED QUESTIONS:

Q: How do I find the right luxury yacht for me?
A: Contact a licensed yacht broker or dealer, they specialize in finding the right new yacht for you and they have an extensive network of listings should you be interested in a used yacht.

Q: How much can I expect to pay for marine insurance?
A: Cost for marine insurance depends on several factors, like your boating experience, current navigational equipment, where your yacht will be used, the value of your yacht and whether you will be living aboard or cruising offshore. Call (949) 581-2333 for Yacht Insurance Help Today!

Q: If I buy a used yacht, who is responsible for paying the yacht broker?
A: Similar to real estate, the seller will pay all yacht broker commissions.

Q: Are there any tax deductions to buying a yacht?
A: There are some tax incentives available for buying yachts, for example if you purchase a new sailboat and place it into charter you may end up paying a great deal of the sailboats purchase price. Check out our Charter Info page for more details on placing a new boat in charter. Check a tax advisor before going down this path to make sure this incentive is applicable for your particular situation.

YACHT PURCHASE CHECK LIST:

Assuming you have already decided the type of boat you’re interested in purchasing, the following checklist will help you through the process. If you haven’t decided on what type of boat to purchase you need to decide what your primary use of the yacht will be: racing, casual cruising, extended cruising, investment, charter, tax shelter, second home or live-aboard.

Find a dealership that sells the range of boats you think you are interested in.
(New Boat)
Create a list of questions to ask the dealer or broker, i.e.
         Where is the boat manufactured?
         What kind of accessories does it come equipped with?
         Do you have it in stock and/or how long is the wait?
         How are warranty repairs made?
         Do you offer in-house financing?
         Do you have a service facility and/or dock side repair?
         Are the service technicians factory-trained and certified?
         Are the service technicians licensed, insured and bonded?
(Used Boat)
         How many hours on the engine?
         Does it need any repairs?
         What accessories come with the boat?
         Has it been regularly maintained?

Schedule an appointment to see the boat and meet with the dealer or broker.
         What is the history of the dealership?
         What experience does the sales person have?

If you like what you see, make an offer (make sure that any issues/concerns are in
       writing and will be resolved to your satisfaction before you close).

Put down a deposit (10% is customary), ensure the deposit is held in a separate
       client trust account.

Request a sea trial, try and have the owner and/or the broker on board.

If it is a used vessel make the purchase conditional upon a survey from a qualified
       marine surveyor. Be sure you choose the surveyor.

If you need a boat loan, be sure you make it a part of the contingency. Be sure your
       dealer can help you with the financing.

Sale agreement is prepared and signed (Be sure the broker is register with the
       department of boating and waterways)

Once you have released all the contingencies you should release the final funds. Final  balance to be paid to broker’s trust account.

All documents should be given to you at closing:
         Ship registration document.
         Warranties and manuals.
         Service bills for equipment or repairs.
         Invoice and receipt for the purchase.
         Sale Contract signed by all owners (if more than one).
         Closing statement that breaks down costs and funds paid in by you.

Make sure your dealer has found you a slip
Make sure your dealer has arranged lessons for you from a licensed skipper.
Make sure your dealer has qualified technicians to help with any after sale service.

HISTORY OF LUXURY YACHTS:

The term luxury yacht refers to a very expensive privately owned yacht which is professionally crewed. Also known as a Super Yacht, a luxury yacht may be either a sailing or motor yacht.

This term began to appear at the beginning of the 20th century when wealthy individuals constructed large private yachts for personal pleasure. Examples of early luxury motor yachts include M/Y (motor yacht) Christina O and M/Y Savarona. Early luxury sailing yachts include Americas Cup classic J class racers like S/Y (sailing yacht) Endeavour and Sir Thomas Lipton’s S/Y Shamrock. The New York Yacht Club hosted many early luxury sailing yacht events at Newport, Rhode Island, during the Gilded Age.

More recently, over the last decade or two, there has been an increase in the number and popularity of large private luxury yachts. Luxury yachts are particularly bountiful in the Mediterranean and Caribbean Seas, although increasingly luxury yachts are cruising in more remote areas of the world. With the increase in demand for luxury yachts there has been an increase custom boat building companies and yacht charter brokers. Luxury boat building and yacht charter companies are predominantly based in the United States and Western Europe but are also increasingly found in Australia, Asia and Eastern Europe. European manufacturers such as Ferretti, Azimut, Azimut-Benetti, Feadship and Lürssen dominate the very top end of the yacht building market.

Some yachts are used exclusively by their private owners, others are operated all year round as charter businesses, and a large number are privately owned but available for charter part time. The weekly charter rate of luxury yachts around the world ranges from a high of Euro 661,500.00 (M/Y Annaliesse) to around Euro 20,000.00. [1] Expenses of approximately 25-30%, such as food, fuel, and berthage are charged as an extra as well as a customary 15-20% crew gratuity for good service. The luxury yacht charter industry functions effectively because private yacht owners mitigate their running costs with charter income as well as keeping their yachts and crew in top running order. Conversely, private charterers charter yachts (rather than owning them) because it is generally considered to be less expensive, and less hassle, than owning a yacht and it also provides them with extra choice related to yacht type, location and crew.

Design & Layout

Yachts from 23 metres (82 feet) and up qualify for design awards from the Superyacht Society, [2] but at the bottom end of that scale yachts will not necessarily be crewed and many set the minimum length for a superyacht considerably higher. A 45 to 50 metres (148 to 164 feet) yacht, the smallest with a generally accepted claim to superyacht status, will usually be a three decker with cabins for 10-12 guests (that is a preferred number, more common than 14, and is found on yachts across quite a wide size range), and for a crew of a similar size. The accommodation on this type of yacht is typically as follows:

* Lower deck: exterior swimming platform at the stern; four (sometimes five) guest cabins with en-suite bath or shower rooms aft; engine room amidships; crew quarters forward.

* Main deck: sheltered exterior deck aft leading into the salon; dining room and galley; entrance amidships; owner's suite forward, usually includes either a study or a second twin stateroom.

* Upper deck: exterior deck aft, often used for outdoor dining; second salon (often called the sky lounge); staffed bar inside or outside or both; sixth stateroom will be amidships if it is not on the lower deck or part of the owner's suite; gym (may also be on the lower deck or part of the owner's suite); captain's cabin; bridge.

* Sun deck: on the roof of the upper deck, often features a jacuzzi.

A 50 metre yacht will have one or more luxury yacht tenders for reaching shore and other "toys" which may include a speed boat or sailing boat, jet-skis, windsurfing and diving equipment and a Banana boat. Up to date yachts have multiple flat screen televisions and satellite communications.

The number of very large yachts has increased rapidly since the 1990s and increasingly only yachts above around 65 metres (213 feet) stand out among other luxury yachts. Yachts of this size are almost always built to individual commissions and cost tens of millions of dollars (most super-yachts cost far more than their owners' homes on land, even though those homes are likely to be among the largest and most desirable). A yacht of this size usually has four decks above the water line and one or two below. It is likely to have a helicopter landing platform. Apart from additional guest cabins, which are likely to include one or more "VIP suites" besides the owner's suite, extra facilities compared to a 50 metre yacht will include some or all of indoor jacuzzis, sauna and steam rooms, a beauty salon, massage and other treatment rooms, a medical centre, a discotheque, a cinema with a film library, plunge pool (possibly with a wave-maker), a playroom, and additional living areas such as a separate bar, secondary dining room, private sitting rooms or a library. There will be more boats and "toys" than there are on a 50 metre yacht.

Mega Yacht / Giga Yacht

As of 2006 yachts above 100 metres (328 feet) are still sufficiently rare, but increasingly more common, that many yacht enthusiasts can name them all. They typically have five decks above the water line and two below. The very largest yachts have begun to incorporate such features as helicopter hangars, indoor swimming pools and miniature submarines. The burgeoning number of "small" super yachts has led to the introduction of the hyperbolic terms Mega Yacht and Giga Yacht to demarcate the elite among luxury yachts.