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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The multihull company has been great to work with. They were very helpful in every stage of our purchase from instill showings to purchase. Karl Reed, Andrew Hodgon and Andrew Holland were great sources of information and helped us find our dream Catamaran. Thank you Multihull!
Sold my L42 here with the excellent help and support of TMCs Croatia sales manager “Zee”. Despite my boat docked on the dry in Montenegro, in winter and in a challenging market, TMC and Zee managed to get her sold, managing the entire process from taking pictures and video’s, putting her out there on the web, prepping her and managing all for inspections….down to the final hand-over documents and managing the escrow payments when all boxes were ticked! Very professional, very helpful (Zee went above and beyond to make sure he delivers excellent service), responsive and successful. Thanks TMC!
We purchased our lagoon 410 through the multihull company, Andrew Hodgdon was the listing’s broker. From the start till the end of the process he was upfront honest and accommodating. Our situation was unique and required a bit more leg work. Andrew was always easy to get a hold of and willing to help. It was a pleasure working with a highly knowledgeable broker that values integrity. I highly recommend him.
My experience with Andrew Hodgdon was entirely positive during the selling process of our used catamaran.
He followed up at every stage, organized successful showings, and explained in detail the closing process.
I am happy to give a 10 out of 10 review.
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