Some of the best deals are yachts that were in the French tax-shelter program. Here is a description I gave to a client of mine:
The French government developed the "Loi Pons" tax shelter program to help stimulate the tourist economies of the French Overseas Territories such as St Martin, Martinique, Guadeloupe and Tahiti. So, the Certified Accountants in France will sell shares in yachts to their clients who need tax deductions. In some cases if they invest 50,000 Euros for a share in a yacht they will get a tax credit of 50,000 PLUS they get some depreciation allowances...so many French taxpayers like to do these. That is one reason why the French build more yachts than any other country. To qualify for the deductions the yacht must stay in charter service for 60 months ... that is why this particular boat we are talking about must stay in charter until March 2015 which is 5 months away. These investors almost never use the boat or even see it.
The charter companies like to "pre-sell" them in advance so they can then plan to order another boat to replace the boat that is "phasing out". So they will discount the boat if you will make a deal in advance. I have done hundreds of these deals and I feel they are some of the best "deals" out there.
Here is how the deal works;
- once you find the boat you want we make a written offer with a 10% deposit, get the offer accepted and do a survey and sea trial. If we find any problems at survey you can cancel the deal for just about any reason. After survey you usually have a week to "accept" or "reject" the boat. Sometimes after survey we give a "Conditional Acceptance" which means you will take the boat IF they do certain things like replace the sails, fix an unforeseen problem, or whatever. Sometimes the charter company demands more deposit down (like 30% total) once you "accept" the vessel.
- then, let's say the phase-out date is March 31, 2015 which is 5 months away. We schedule the surveyor to go back and re-inspect the boat upon phase-out to make sure there is no new damage. If new damage is found that costs less than 5% of the value of the boat to fix then the charter company must fix it and the Buyer must proceed with closing. If the damage is over 5% of the value of the sales deal then the Buyer has the option to cancel the sale and get a refund of deposit OR we negotiate with the Seller to repair it.
- then when the boat passes the "second survey" the final amount is due and the charter company proceeds to deflag the vessel and transfer title. The French government then issues a deflag certificate which guarantees a clean title. It is the best title in the world because of this solid guarantee. This can take 3-6 weeks to get.
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