Buying and Selling Boats - Everything you need to know!
Buying or selling boats can be an exciting yet challenging endeavour for any recreational boater, whether it's your first boat purchase or you're parting with one you've owned for years. Several essential factors must be considered in the process.
Just like when purchasing a house, it's crucial not to get carried away by the allure of buying a boat. Instead, focus on the practical and financial implications. However, unlike house buying, there's no standardized legal process for the sale and purchase of boats.
While the boat buying or selling process doesn't have to be overly complicated, it does require careful consideration of various aspects.
When and how to sell your boat:
Selling your boat before or at the start of the boating season, especially when interest in boating is high, can be advantageous. To buy a boat, keep an eye on local newspapers, yachting press, websites, Facebook groups, brokerages, or rely on word-of-mouth within the boating community.
When considering a boat purchase, determine the type that best suits your needs, whether it's a sailboard, a large sailing vessel, or a powered boat. The type and size of the boat can significantly impact the process and price.
For both sellers and buyers, setting a fair and objective price is vital. Conduct thorough research by examining similar boats on the market, assessing the boat's true value, identifying potential repairs, and being clear about your budget. Be prepared to negotiate, and establish both a minimum and maximum price in your mind.
Remember a brokerage service will have access to all of the top boat listing websites
The nitty-gritty of buying and selling boats:
The sale of second-hand boats
usually takes place between private individuals, often facilitated by a broker acting as the seller's agent. VAT is not charged on second-hand boat sales between private parties, but the seller pays VAT for the broker's services. The broker typically charges a commission to the seller for their assistance.
Before finalizing a boat purchase agreement, the buyer must ensure that the seller is the rightful owner of the boat and has the authority to sell it. Additionally, they should confirm that the boat isn't burdened with mortgages, debts, or other charges.
If the boat has a mortgage, it's advisable to discuss the redemption process with both the seller and the lenders. Often, the purchaser pays the outstanding mortgage amount directly to the lenders upon purchase. The lenders may hold the boat's title documents and release them to the seller/purchaser after the mortgage is cleared.
When buying a boat, it's essential to request copies of all title documentation to verify ownership, UK VAT status, Recreational Craft Regulations (RCR) compliance, and VAT exemption if applicable.
For sellers, having proper paperwork is crucial. You'll likely be asked for documents proving domestic goods status, registration, RCD compliance (if applicable), service records for the engine, generator, sails, water heater, Builders Certificate, Bills of Sale, Owner's Manual, equipment manuals, and financial records.
While verbal agreements hold legal validity, it's recommended to use a written Sale and Purchase Agreement for all boat transactions.
When using Burton Waters for your boat sale, all documentation is organised by our administrative team to ensure the sale goes smoothly and all I's are dotted and T's crossed.
Are there different types of boat sale?
There are many other options when selling a boat, and Burton Waters can help advise you as to the best course of action for your particular vessel and circumstances:
Part Exchanging Your Boat
This is a great option for those looking to upgrade to a newer model. Putting your old boat towards a new purchase often means you get a really good price for your existing vessel and allows you the freedom of purchasing a new boat
without too much much downpayment.
Selling Your Boat to Trade
This is where your sell your boat directly to a dealership for resale. This option will likely get you the lowest return, but is a great option for people looking for a fast and guaranteed boat sale with the least amount of hassle.
Boat Brokerage Services
Some boat dealerships, like Burton Waters offer boat brokerage services, which means that the dealer sells your boat for you, and charges a percentage of the sale price, a little bit like an estate agent but for boats. This allows you to sit back and relax whilst the dealership does 90% of the work for you to ensure as quick and smooth a sale as possible, whilst also getting you the best price for your boat. This can take time so is not ideal for emergency sales.
Some people choose to sell their boat personally through online channels such as eBay, Facebook marketplace or gumtree. Whilst this option does mean that you don't outlay any cost, it does mean that you are limited on the portals you are able to display your boat, and is often the least preferable option for people with busy lives.
The Practicalities of buying and selling a boat:
Burton Waters advises all used boat buyers to have a survey conducted on second-hand boats before finalizing the purchase. Sea-trials are also recommended, where possible and applicable, to assess a boat's performance in the water.
Boat insurance, while not compulsory in the UK, is highly recommended, especially considering third-party liability insurance.
Buying and selling boats within the EU:
After the Brexit transition period, the UK and EU became separate custom territories, affecting the VAT status of boats based on their location at the end of the transition period. Importing a boat to the UK from the EU may require paying import VAT and duty, unless eligible for VAT relief schemes.
Similarly, when purchasing a boat in the EU, you need evidence of Union goods status (EU VAT paid) if you plan to keep the boat within the EU. New Recreational Craft Regulations apply for vessels imported from the EU to the UK.
UK buyers/sellers are advised to include English and Welsh (and Scottish if relevant) law and jurisdiction clauses in their Sale and Purchase Agreements.
For more information on buying and selling boats, speak to one of our friendly team today!