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How to buy a yacht

How to buy a yacht

You decide to become a boat owner. For the process to go in the right direction, you should clearly define for yourself the following points:

What kind of yacht you want: motor or sailing, new or "used", its style and model, size, number of cabins, hull material (steel, aluminum, fiberglass), seaworthiness...

How will you use your yacht: for short trips along the coast or long sea cruises on the high seas for a long period of time. For example: for short sea voyages no further than 6 miles from the coast - for fishing, walking or diving, it is better to give preference to boats with shallow draft, and a platform for swimming. For longer voyages at sea over long distances, you should choose boats from 10 to 50 meters with two motors.

How long are you willing to wait: If you are willing to wait to get the yacht model you want, then you can consider building a yacht.

Where to put your yacht: it is very difficult to rent a berth on the Côte d'Azur for long periods of time, as there is simply not enough space. Before you buy a yacht you need to consider where you are going to place it.

The safest and most expensive way is to "buy" a berth, but in France buying a berth has its own peculiarities: the beach belongs to the state as well as the berths located on it. You can buy the right to use the mooring for a fixed period, until the end of the port concession period (from 10 to 99 years). This right of use - "amodiation" - is given to an individual or company, and this person becomes a shareholder or shareholder of the marina.

Leasing the yacht will help to solve the problem of berthing in the summer.

Buying a berth in Monaco has its own features: you must be a permanent or privileged resident of the Principality of Monaco or be a member of the Yacht Club of Monaco.

When buying a yacht, it is better to have it delivered in the spring, then you will not have to pay for its wintering.

At what price to buy a yacht

Different parameters affect the cost of the boat:

  • year of manufacture and type of vessel;
  • the manufacturer - shipyard: a yacht from a well-established shipyard will cost an order of magnitude more than a similar yacht from a lesser-known manufacturer. It is also important to know that if you live on the Côte d'Azur, shipyards specialized in the Mediterranean and Atlantic seas should be preferred in case of trouble;
  • The technical equipment of the ship: engines - their power and age (number of hours on engines), the level of navigational equipment, as well as the hull material;
  • Interior finishings and comfort elements - size and equipment of cabins, additional rooms - bar, Jacuzzi; yacht accessories - tender, toys.

What are the costs after purchase

Do not forget the annual maintenance costs: maintenance, payments for anchorage, water, electricity and communication, crew salaries, insurance, consumption of fuel for trips at sea and, if required, management.... The cost of maintenance is approximately 10% of the cost of the ship per year and lower at the beginning when the yacht is new and when the warranties are valid, and increases over the years as the yacht gets older. It is advisable to do frequent maintenance and cleaning of the yacht, ahead of time and not wait until something breaks. It can be vitally dangerous if a breakdown occurs on a voyage at sea, moreover it costs much more than regular maintenance and repairs. Due to the fact that the yacht is constantly in a humid environment, it is prone to corrosion, deterioration from sea salt, moisture and sun, so constant inspection and maintenance is necessary. Keep in mind that a yacht with a "transparent", authentic maintenance history is more attractive on the secondary market and has a higher value.

How to finance the purchase of a yacht in the European Union

Is it possible to obtain a loan: to be able to obtain a loan or lease from a European bank you must pay taxes in the EU. Additional guarantees for banks for a loan will also serve as availability of real estate or business, account in a local bank.

It is common practice for European financial institutions to offer buyers a leasing program where you lease a yacht for 12-15 years with an option to buy it out at the end of the lease. Usually they require 25-50% of the yacht's value to be paid, with the balance to be paid monthly. The benefits are that VAT in such a leasing program is paid at half the rate.

How to make a deal when buying a used yacht

Once you've made your choice, you send the owner your quote in writing. It will also be appropriate to indicate the expiration date of your offer. If the owner agrees with your price, the broker will have you and the seller sign the Mediterranean Yacht Broker's Association Memorandum of Agreement (MYBA MoA) that outlines the transaction and payment terms. This form of agreement, developed by the Mediterranean Yacht Broker's Association and based on legal rules and practice, is used by all serious brokers.

The practice is that immediately upon signing the agreement, you have to pay a deposit of 10% of the value, which is transferred to an escrow account (you can choose whose account to use - the broker's or your lawyer's. The balance of the amount is paid after the final decision on the purchase is made and after the inspection - the survey. The survey or inspection is done by an independent expert. (Better if it is an expert accredited in the country whose flag the yacht will fly - it will save you on the survey, which you must pass for certification under the new flag). The expert conducts a computerized check of the engines and a test drive, an outing at sea where the boat's behavior at maximum engine load is checked. Usually the boat is lifted out of the water and the integrity of the hull and propellers is checked to ensure the boat is free of osmosis, a disease that affects the hull of yachts. In some cases oil samples can be taken for laboratory analysis. In a few days you receive a report from the expert, on the basis of which you either refuse to buy or agree. Sometimes the price can be corrected based on the expert's data. You should also verify the yacht with the insurance company to verify that there are no claims from third parties.

What documents are needed when transferring a yacht from one owner to another
If you transfer a yacht from an old owner, make sure you have the previous registration certificate, insurance policy, commercial certificate (for commercial vessels) and all maintenance instructions and EC declaration of conformity. It's also helpful to have all records and invoices of repairs and work done on board. You get an invoice or bill of sale which shows that the boat is exempt from fees, taxes, etc. The bill of sale is signed at the notary and the owner provides a certificate of removal of the yacht from the current registration (also deregistration, or removal from the flag). You can simply have the Bill of Sale on hand to go to sea, which must be notarized and apostilled. Also have a valid insurance policy on hand. When you transfer ownership of the boat, the previous insurance is no longer valid. Lack of insurance can lead to fines and prohibition to enter the port.

How to register a yacht

Any yacht, new or used, must be registered and flagged. Registering a yacht implies granting her the right to sail under the flag of any state (i.e. determination of the nationality of the yacht). The main document for registration is Deletion Certificate - a document confirming that the vessel is removed from the previous register and flagged. When processing the ownership and registration of the yacht, it is necessary to determine whether the yacht should be privately owned or owned by the company. For example, a private yacht registered outside the European Union may stay in the waters of its member states for only 6 months a year. Using the scheme of temporary admission, non-residents of the European Union can extend this period up to 18 months. At the same time the yacht having commercial status and used for charter (for lease) can remain in the waters of the European Union even after 18 months, as well as enjoy such benefits as duty-free fuel purchase.

How to insure a yacht

The following points will be taken into account during insurance: initial information about the yacht (manufacturer, year, length, etc ) use of the yacht, both in the short term and in the long term. Geography of sailing, nationality of crew, Flag and even whether the boat will be in management or not are facts that affect the cost of insurance. Tenders and all watercraft must also be taken into account when making an insurance contract. There is usually a separate insurance contract for them.

Buying a yacht is not an easy task and you should not engage in this process on your own. It is better to trust a specialist who knows all the pitfalls of yacht selling and buying and will help you to buy a yacht successfully.

Please, contact the agency for more detailed and individual advice.

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