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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My wife and I worked with Andrew Hodgdon to sell our 2021 FP Elba 45. In addition to skillfully carrying out the traditional yacht broker responsibilities, Andrew went above-and-beyond to ensure that we were well-positioned to sell in a competitive market. For example, Andrew helped out with much-appreciated repairs and hurricane prep, among other things. Trustworthy, intelligent, and conscientious, Andrew’s communications with us and the buyer were always thoughtful and forward-thinking, and fairly represented our interests.
We really lucked out in connecting with The Multihull Company. We made a cold call to Cynthia Wummer, a Multihull Company broker and told her we wanted to buy a catamaran to cruise The Great Loop and experience the Bahamas. We particularly wanted a PDQ power catamaran. From our first contact she was so helpful and responsive. She immediately contacted a selling broker who represented a prospective seller. Because we are new to a bigger boat and boating on the ICW, Cynthia assisted us through the entire process. She is a captain which was an added bonus to the process; she knew all the right questions to ask the selling broker as well as the surveyor. She drove 3 hours to be present during the survey, she developed a good relationship with the selling broker, she called and checked in with us regularly, was very enthusiastic about our purchase, and answered all our questions. We could not have done it without her. The Multlihull Company support team, Andrew Holland and Courtney Greider, were so helpful in the closing process: the paperwork was easy to complete and communication was smooth and timely. We wouldn’t hesitate to recommend The Multihull Company and Cynthia to anyone who is the market for a boat large or small. Thank you!!!!
Multihull Company has succeeded again. This is my second time using their services and they are extremely professional and honest. Working with their brokers and their administrative team was easy. Communication occurred at every level and constructive advise was always given. They know this business inside and out and acted as my fiduciary in every way. I will use them again for their service and knowledge.
Great to deal with and very patient in our questions. They were able to find us the perfect vessel for our needs.
Successful relationships cannot exist without it. At The Multihull Company we base every relationship on a firm commitment to earning and retaining our client’s trust.
Advice of any kind is valuable only when grounded in hard-won expertise. It too, must be trustworthy. Trust and expertise define the heart and soul of The Multihull Company. We are a team of skilled professionals who thrive on providing expert, trustworthy advice and service to catamaran and trimaran sailors around the globe.
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