Janneke Kuysters explains how you can sell your yacht for full price after crossing the Pacific
Buying a boat, sailing across the Atlantic and then exploring the Pacific, before selling it for the purchase price in New Zealand or Australia sounds like a dream come true. But is it really possible to sail halfway around the world effectively for free, by recouping the costs?
“Yes, it worked out very well for us,” says Lindsay Crutch. The Australian yachtsman had just finished sailing from France to Australia with his family on their Fountaine Pajot Lucia 40 Sandy Cheeks.
“We bought the boat brand new in France and cruised along the French coast to Spain to get used to sailing her. Then we crossed the Atlantic, and enjoyed a spell in the Caribbean before we sailed through the Panama Canal into the Pacific.
“A year and a half after leaving France we tied up to our dock in Newcastle, New South Wales. A month later the boat was sold at the same price we bought it for, so basically the cost of the trip was the running cost of the boat and the insurance. I’d do it again in a heartbeat,” he adds.
“It can work out well,” agrees Robert Vrind. Vrind is a yacht broker with Yoti on the Gold Coast in Queensland, and regularly deals with cruisers wanting to sell their boats in Australia.
“Cruisers are either done with their sailing or are on limited budgets. The prospect of a long Indian Ocean passage and trip around South Africa home to Europe is not very appealing. It will easily add another year to the cruise and take another big bite out of the remaining savings. The vessels will be another year older, with considerably more hours on machinery, more wear and tear, and quite likely fetch less back home than in Australia.”
Article continues below…
You can lose a lot of friends when you’re sailing across the Pacific. After the first couple of photos you…
“No pizza today.” When this announcement is made at Port Cygnet Sailing Club, all conversations among members in the clubhouse…
He adds: “However, when you want to sell the boat here, you need to be aware of the intricacies of the Australian market: not every boat sells well here. Australians like catamarans more and more, but also production monohulls like Bavaria, Jeanneau, Beneteau and Hanse are popular. Berthing is expensive, so a good size is between 35ft and 45ft ideally.
“Little known, big, steel bluewater cruising boats will be harder to sell. Second-hand boats keep their value here, because the yacht building industry in Australia is geared only at fairly expensive custom-built boats.”
“The watersports industry is relatively young in Australia: only in the past decades has the larger public taken to sailing,” comments Lee Randall of Ensign Yacht brokers. “This creates a strong demand for second-hand boats, but the buyers are well-informed. Only certain brands sell very quickly; Bavaria, Lagoon, Leopard and Fountaine Pajot are the favourite brands for catamarans. A steel or aluminium boat could take up to a year to sell.”
An international market
At just four million, the population of New Zealand is much smaller than Australia (25 million), so logically you’d think the market for second-hand boats would be smaller. Bill Garlick, who owns a well-known brokerage in Opua (Bay of Islands), explains why that’s not necessarily the case:
“New Zealand is the southernmost major land mass in the South Pacific and is a nation obsessed with recreational and competitive sailing. It’s also high on the ‘bucket list’ of countries to visit so, not surprisingly, increasing numbers of cruisers who don’t want to cross the Indian Ocean or back track across the Pacific are saying au revoir to their yachts here, often exploring New Zealand by road before flying home.”
He adds: “Prices in New Zealand for well maintained and equipped offshore capable yachts are favourable for several reasons. New yachts arriving in New Zealand on transporters are priced to include freight, duty at 5% and GST (VAT) at 15%. A new yacht with an ex-factory price of NZ$450,000 could attract close to NZ$150,000 of additional costs. Owners who sail into New Zealand can expect to bank some of the delivery costs.”
Garlick says that good yachts can often attract buyers from outside New Zealand too. “It is our experience that the market for bluewater-equipped and capable yachts is international, and buyers’ preferences are much the same as they are anywhere in the world. Buyers are generally happy to travel to New Zealand to view a yacht.
“Well-known brands such as Amel, Beneteau, Catana, Hallberg-Rassy, Jeanneau, Leopard, Lagoon, Privilege, to name a few, are popular among ‘first-time liveaboards’.
“Modified or customised yachts are discounted relative to an ex-factory model. Glassfibre is the preferred construction material, with less interest in aluminium, steel and wood, even though Kiwis love wooden boats.
“Very few buyers are looking for a low priced ‘project’, and neglected or poorly maintained boats are heavily discounted. Unusual features such as freedom, gaff and junk rigs along with bilge and canting/retractable keels have limited appeal.
“Time on the market is directly related to price. Typically we suggest three prices to sellers: ‘top dollar’, which means waiting for the one buyer and a lengthy sales process; a ‘mid-range’ price, with an expectation that a sale will be concluded within 12 months, and the ‘gone in 90 days price’.”
Cliff Smith, an American cruiser, went for the last category and sold his Young Sun 35 Carola almost at the quarantine dock after arriving in New Zealand. It went to a British buyer who was keen to start cruising immediately.
“In 2014 we left the United States to cruise the Pacific,” explains Smith. “Although we loved Carola, after a few years cruising we wanted something larger, faster and more comfortable. A beautiful Najad 440 was for sale in New Zealand, but they had just left Opua for the Tropics. We ended up buying the Najad there and selling Carola very quickly after that in New Zealand.
“The help of a broker is very important when buying and selling your yacht overseas; they bring serious buyers and sellers together and they have knowledge of the legal and fiscal issues involved.”
Increasing your chances
It pays to come well prepared if you plan to sell your boat in New Zealand or Australia. This starts with the selection of the right boat with the right specifications to increase the chances of a quick sale.
Contacting a broker in advance can also be a smart idea. We also saw many Australian brokers ‘work the docks’ in, for instance, Pape’ete, Tahiti, to source popular boats for their markets. This may be a good starting point for the process of selling it.
Tax and costs
New Zealand Customs offer two main options for yachts arriving in New Zealand. The most popular for transient cruisers is a two-year Temporary Import Entry (TIE) evidenced by NZ Customs ‘yellow’ C4G form, which entitles the holder to VAT (GST15%) exemption on goods purchased for the yacht and the rental cost of berths. If the owner holds a C4G form, the yacht cannot be advertised for sale in New Zealand.
The second option arises if you advise NZ Customs on or before arrival that the yacht will be sold in New Zealand. The TIE will be issued for one year without a C4G, a refundable bond equal to duty and GST will be payable, and there’ll be no GST exemption on purchases.
The payable duty (5%) and GST (15%) will be calculated on the cost of the yacht less depreciation at 10% per annum. The result can be surprisingly low duty and GST. If for any reason NZ Customs decides to calculate duty and GST on current market value, rather than depreciated cost, a valuation from a recognised brokerage will be required.
Duty and GST is immediately payable if the purchaser is a New Zealand resident. Neither duty nor GST is payable if the purchaser is foreign. Following sale, the yacht can usually stay in New Zealand until the TIE expires.
Bill Garlick adds: “NZ Customs has wide discretion and tend to treat each yacht on a case-by-case basis. Some recent decisions indicate more empathy and understanding of cruisers, for example, permission has been granted for some yachts holding a C4G to be advertised in New Zealand when a change in personal circumstances precipitates a sale.”
For more information visit customs.govt.nz and search ‘yacht and small craft’ and ‘Form C4G’ for relevant pdfs.
In Australia you have to pay the tax upfront at the moment the boat is put on the market: 5% on the value of the boat and 10% GST on the value of the vessel with the duty added. The valuation is done by an accredited yacht surveyor (a typical valuation charge is AU$20/ft) and is usually based on the sales value of similar boats.
Repairs, parts and maintenance work are exempt from VAT (GST in Australia, 10%).
For more information, visit: abf.gov.au
First published in the November 2019 edition of Yachting World.