Buying a Boat in Europe

© Copyright 2005:  Jack Tyler

 Does the thought of cruising in Europe appeal to you, but not the diligent preparation or time and effort it takes to cross an ocean?  Do you have a limited time window, or perhaps a limited budget?  Or both?  You may be a good candidate for buying a boat, new or used, already located in Europe, allowing you to jump more easily – and perhaps, more quickly – into ‘cruising mode’.

 It’s also fair to say that the selection of boats in Europe – both power and sail – is highly diverse in nature, and especially so in Northern Europe.  Canal boats, power cruisers, motorsailers, and a wide selection of sailboats – built in steel, aluminum and GRP (Glass Reinforced Plastic or ‘fiberglass’) – can be found in brokerage as well as being built to order, often with customizing possible from the builder.

 However, the devil can be in the details.

 

 

Is Your Cruising Boat Here?

This diverse collection of boats is berthed in Sixhaven Marina, Amsterdam

 

Why Purchasing in Europe Might Make Sense:  While this option will not fit everyone’s budget, circumstances and goals, there are many ways in which purchasing a European-based boat can support plans for cruising there.  Before we take a look at the trap doors and trade-offs, let’s spend some time noting the benefits.

 

Time Savings:  The most obvious advantage - that the boat is already in Europe – has many potential benefits. Your purchase may require some additional fit-out to make the boat suitable for full-time cruising and living aboard in the Med or Northern Europe.  But it will not need to be set up for crossing an ocean, so this expense and effort can be avoided.  For example, you may not feel you need to install a wind vane or below-decks autopilot, making do instead with a helm-mounted unit.  Or you may not feel the initial necessity of replacing the standing rigging, if looking at used boats.  Or you may be satisfied with a coastal life raft, which will cost less than a fully outfitted, ocean-capable raft.  The cost of charts and guides needed to get you across the Atlantic and to your first cruising grounds can go instead towards the purchase of those charts and cruising guides needed where you first plan to cruise.  This outfitting expense can be substantial and the savings significant.

 

Another benefit of its European location is that you aren’t locked into the seasonal ocean-crossing timetable.  Crossing to Europe is typically done in the early summer, as the spring’s weather systems are dissipating but before the threat of the summer’s hurricane season begins.  Given the intense preparation phase usually required prior to such a crossing and perhaps some transit time from your location to a logical departure point on the North American east coast, you might be sidestepping an entire year or more of time if some of it is dedicated instead to finding and purchasing a European boat.  This time savings can be furthered if the boats you consider are already located in an area where you wish to begin your cruising, e.g. Scandinavia or perhaps in Spain or Turkey.

 

Plug-in Ready:  These boats will already be set up for the existing European infrastructure, meaning for example it will be capable of using dockside 230V single phase AC and any AC motors on board will be designed for 50 Hz AC.  The boat’s LPG system will accept Camping Gaz and/or Northern Europe propane bottles, and its installation will likely be in accord with any local regulatory requirements.  And if you want to augment the boat’s existing systems (perhaps a diesel-fired heating system if cruising up north is planned), vendors in the boat’s local area will be available to accommodate your needs, installing European systems with their EU-compliant warranty and consumer protection benefits.

 

Paying or Avoiding Value Added Tax  – Your Choice:  Most used boats in brokerage will hold VAT-paid status, meaning a previous owner has paid the Value Added Tax associated with the purchase of the vessel.  This single feature will eliminate any need for you to worry about where and for how long you subsequently cruise throughout the EU, even though your vessel will most likely be foreign registered. (See the chapter VAT: The Ugly Acronym for more discussion on this point).  If choosing a boat with VAT-paid status is your preference, you’ll want to stipulate that a seller provide proof of the vessel’s VAT-paid status in sufficient time prior to the sale’s closing so it can then reviewed by the local Customs personnel.  This will bring you peace of mind along with confirmation that the vessel holds adequate documentation that presents no VAT-status ambiguity.

 

Since VAT is only assessed one time on a vessel, rather than being assessed each time it is purchased as with a sales or use tax, such a boat will never again be liable for a EU-related VAT assessment by any EU member, current or future.  Especially if you prefer purchasing a new boat, VAT will add significant cost (roughly 20% +/- of the full purchase price), so this may not prove sensible if you plan to sail back to your home country.  However, another option is to inquire about taking formal delivery of the boat in one of the EU countries where VAT is lowest, thereby minimizing the VAT payment while still having VAT-paid status.  Why would anyone choose to pay VAT?  Don’t overlook the fact that, within the EU, most of the value of VAT paid on a vessel ends up being folded into the equity value of the boat.  Consequently, if you plan on later selling this boat within the EU after your European cruise, much of the VAT cost will be reimbursed as part of the sale price and, meanwhile, you won’t VAT-based time restrictions on your cruising plans.

 

European Union Members, as of May 1st, 2004

 

Conversely, you can seek out used but non-VAT-paid vessels to choose from, which should benefit by a better price given their less attractive nature (and lower equity value) to EU buyers.  These boats might be found in the Eastern Med, in the Channel Is. or Gibraltar, or perhaps in some sleepy marina along Spain’s coast or elsewhere inside the EU.  Registering a used boat in your home country will most likely result in no immediate tax liability back home while concurrently avoiding VAT liability within the EU, assuming you honor the EU’s Temporary Importation guidelines described elsewhere in this web site.  If you later plan to return the boat to your home waters, there would be no long-term benefit in the boat having VAT-paid status, so a lower purchase price would make a good deal of sense.  And if you are purchasing new, you can similarly elect to document or register the vessel back home at the time of purchase and avoid paying VAT, again assuming compliance with Temporary Importation limitations.  If purchasing new through a dealer back home, the dealer should be able to give you more specifics on VAT avoidance.  However, even then I would recommend some parallel research on the builder country’s Customs (Douane/Zoll/Toll/etc.) website.  Some of these websites are multi-lingual, very informative and can equip you with a printed summary of your rights and their procedures, all from an official source.

Broad Selection:  As mentioned above, in the European market you will find an amazing diversity of choices in design, hull material, layout and build quality, perhaps far more diverse than back home.  This will include designs that are specifically intended for certain types of cruising (e.g. in colder, wetter climates or in shallow waters).  On the one hand, you can choose from production boats well known in North America and other international sailing venues.  We’ve seen many models from Jeanneau, Beneteau, Catalina, Island Packet, Hunter (sold under the ‘Legend’ brand name in the UK) and others, for sale both new and used in Europe.  But you will also find many unique choices that are less common or completely unknown back home.  These could include specialty choices such as compound curved steel and aluminum construction such as Linssen’s line of displacement hull powerboats.  You will find sailboats with bilge keels, and even Hunter’s Legend brand builds bilge keel boats in the UK.  You will find ‘keel-less’ hull forms built by companies like Alubat or Northshore’s Southerly line.  If you plan to return the boat to shallower home waters like the Chesapeake or the Gulf Coast, perhaps looking at the French Feeling brand of centerboard boats (“lifting keel” in EU-speak) might appeal.  If planning to sail the boat in the colder waters of the Great Lakes or the Pacific Northwest – or if planning extensive offshore sailing – perhaps the foam lined, heavily insulated and unsinkable Belgium Etap line will appeal.  Or perhaps you are looking for a more unique choice that checks all the right ‘cruising boxes’ and permits much customizing to be done, as well – perhaps a Malö from Sweden, a BOOD with its jumper-strut staysail rig or a German-built Vilm sloop, all three offering integral hard dodgers and multiple layout alternatives.  Choices abound in Europe and will definitely add some zest to the shopping experience.

 

Other Considerations:  A variety of brokers and builders these days are quite accustomed to dealing with the overseas buyer.  Most builders of new boats today have dealer franchises in many countries, while European brokers will sometimes have affiliate relationships with brokers elsewhere in the world.  If you partner with the right company – broker if buying used or builder if buying new - much of the purchasing process’s confusion will melt away, although not necessarily the costs, paperwork and details.

 

You also may be able to enjoy a “free” European visit if purchasing abroad with plans to sail her back rather than buying the same European-built boat and having it shipped back home for delivery.  After all, shipping costs will easily exceed a couple flying to Europe and spending a week or two shopping or factory touring.  This logic only applies if you’ve already decided on a European boat, of course.

 

Disadvantages, Cautions and Other Considerations:  Reading about the many benefits of buying abroad, you might wonder if almost everyone is doing it.  In reality, it isn’t that common – and that’s especially true for purchasing a used boat, although I’ll show you a great example where it made perfect sense.  One axiom with all boats is that every feature of a given design can add utility or appeal in one respect, but the same features create compromise and trade-offs, as well.  It is the same with buying a boat in Europe for European cruising:  Every benefit brings with it some sacrifice or alternative issue to be addressed.

 

And with cruising as with life in general, some of the personal fulfillment comes from the effort and not just the results, from the voyage and not just the destination.  Buying in Europe means missing out on the challenge and also the satisfaction of doing an ocean crossing – or two – in your own hull.  And what they say is true:  You will never know a boat as well as when you invest yourself in preparing her for an ocean crossing.  You will also miss out on visiting some interesting and unique destinations along the way, such as Bermuda, the Azores and perhaps the Atlantic Coast of Spain and/or Portugal.  And that’s in part what cruising is supposed to be about, isn’t it?  In truth, an in-season Atlantic Crossing is more of a psychological hurdle for most people than it is a physical or skills-related one.  With careful weather watching and thoughtful preparation, you too could manage a crossing and reap the sense of accomplishment that comes with it.  In truth, was such a challenge part of what initially got you to think about cruising in Europe?  If so, do you – should you - want to give that up?

 

Can it be too European?  A boat full of metric fasteners and plumbing fittings, and equipped with European systems, will present somewhat the same ‘fit’ issue in reverse if your plan is to return the boat to non-European waters.  Some systems may even need to be replaced.  For example, if originally built for European 230V AC power, will the installed AC wiring be able to carry the higher current at 120V that runs inside a boat back in North America.  What about the breaker capacities on the AC Panel?  And surely those outlets will need to be switched out if they are one of the Euro configurations.  If purchasing new, builders will typically offer systems that are compatible with your home waters, along with adaptations that permit operation in Europe, as well.  However, not all builders supply large numbers of boats worldwide and therefore may not be as knowledgeable on compatibility issues as you would hope.  And in any event, some compatibility issues might sneak in regardless, as e.g. when the builder molds in a LPG locker for GAZ bottle storage that won’t accommodate North American 10# or 20# LPG bottles.  As with many of the issues discussed here, this is a good example of why it’s so helpful to talk to owners who have gone before you – preferably having bought the model you are considering – and who have already identified the ‘fit’ issues and perhaps can advise you on how to optimally spec out the boat.  An experienced dealer who sells your preferred boat back home will be invaluable in this area, as well.

 

Special Timetables:  If you are buying new, planning to export (sail away in) your boat and not paying VAT, be sure you check with your builder country’s Customs officials about how much time you are allowed before needing to exit that country.  At the time you take delivery, this can be far less than the18 months provided by the EU’s Temporary Importation scheme.  The builder did not export your boat, even though you registered it back home, so the builder may feel obligated to obtain documentation from you that the boat exited the EU.  This will in turn provide him proof for his Customs officials of its “export” status.  Also keep in mind that you may want to extend the legal delivery date well beyond the last payment date, e.g. if paying for your new boat on completion during the winter season but not being able to sail it away until the following summer.  And as was mentioned to me more than once by new owners, don’t plan to head over the horizon after taking delivery of a new boat from the yard.  You would be far better off to cruise the boat locally for a few weeks, exercising every possible system aboard, so that warranty work can be handled without objection, by the yard, before you leave the area.

 

Diversity Can Look Like Perversity:  While the diversity of European boats might lead you to be attracted to a unique design or custom builder when buying, this subsequently might be somewhat of a liability when selling, whether you are later trying to sell back in your home waters or in some other region of Europe.  A boat loaded up with teak decks and diesel-fired heating but few opening ports and little icebox insulation may not resonate with the buyers back home in Florida, the Gold Coast of Australia, or the Caribbean.  And even if the boat enjoys a generally positive reputation, prospective buyers may worry about those same ‘fit’ issues, requiring some amount of modification and expense at the time of resale.

 

Think Logistics:  Language and cultural differences, legal and procedural differences from one EU country to the next, and differing time zones are just some of the logistical issues that, in small or large measure, will affect the purchasing process.  One small example is that your signature may need to be notarized on purchase documents, but notarizing a signature in your country will not produce an acceptable result in the builder’s or broker’s country, where this is done by an attorney.  Or you may be required to have a document (one example might be the liability insurance coverage on your new purchase) translated from English into the builder or broker’s language by an “authorized” translator.  (This is usually resolved by contacting that country’s Embassy or Consulate in your home country and requesting assistance in locating an ‘authorized translator’).  You may assume the boat shown by a builder represents how yours will be completed, while it may be local practice for the builder to change the boat’s specifications without notification.

 

It’s easy to invent things to be concerned about and, to some extent, these may apply to any purchase, not just one being executed in Europe.  For new boats, it’s my impression that working with an established dealer who represents the European builder and has imported from them for some time will produce the most satisfactory results with fewer surprises than perhaps working directly with a smaller builder who enjoys no representation ‘back home’.  Of course, I’ve also spoken with sailors who made successful purchases doing their own work, as well.  The point I want to make is to think about the last boat or home you purchased, and then fold into that experience the time zones, languages and other potential differences that will – inevitably – shape the overall experience.  This hardly makes a European purchase impossible; it does make it ‘different’.

 

‘The Boat’s Price’ vs. ‘Your Cost’:  The actual purchase cost never seems to be as low as originally anticipated by those buyers with whom I’ve discussed their European purchases.  There can be many reasons for this, and not usually due to intentional misrepresentation of the boat.  You’ll find examples of miscellaneous costs in ‘Logistics’ above, but there can be others as well.  For example, travel to the builder’s yard may need to be ‘built in’ to the purchasing cost, whether to examine and discuss a builder’s options or examine a specific used boat prior to purchase.  And Europe’s mature bureaucracies long ago perfected the ability to create revenue sources; you may discover fees associated with the acquisition that are not common back home.  Also, importing any boat gear with which to equip your new boat may be taxed, or perhaps must be stored for a period of time, of course after a shipper and its agent are both compensated – and you may need this equipment installed by the yard or a local vendor (at some further cost) since you are not there to do the work yourself.  Also, don’t be surprised to learn that a builder, if remote from an area where marine chandlers are located, has an affiliated business that supplies everything from dishes and tableware to bedding, all at European prices because in the end that simply becomes an easier (perhaps also cheaper) option than shipping all those things from back home.  And last but by no means of least financial impact, a somewhat common theme when buying ‘new’ seems to be the unavoidable (if oh-so-pleasurable) ‘extras’ that one decides to add when visiting a builder’s yard and learning more about how the European builder can customize a new boat for you alone, a common practice among select Euro builders.

 

The EU, VAT and ‘Musical Chairs’:  Let’s not forget the bigger picture if you are thinking of purchasing a boat without paying VAT and staying in Europe for some time.  The EU appears likely to continue growing, which over time inevitably shrinks those locations where a used boat can be purchased (and is likely to be priced) outside the EU VAT scheme.  For example, it used to be more common for a European to buy a boat but choose to base the boat in a VAT-exempt location rather than pay the VAT.  For example, they might base it in a spot like non-EU Malta or in the Channel Is.  Over time it migrates to a sleepy little harbor in Greece or on the Spanish Algarve.  The owner commutes to it while escaping (or hiding from) VAT liability, enjoys his boat for some years but eventually decides to sell…and that’s when you come along.  Malta used to be one place where non-VAT boats were brokered but it is now a EU member.  Customs oversight along the Iberian coast is hardly indifferent.  Put another way, finding a boat with a price not inflated by VAT-paid status is getting tougher.

 

Similarly, cruising such a boat while avoiding VAT liability will become incrementally more difficult in the years to come as fewer cruising destinations fall outside the EU envelope.  It appears likely that Gibraltar, the Channel Islands, Norway and the North Coast of Africa will have no EU involvement for years to come.  But some non-EU, popular cruising countries today are eager to enter the EU tomorrow.  Like the game of Musical Chairs, in a few years we all may find Croatia and, some time after that, Turkey no longer a place to step outside the EU when the ‘music’ (our 18-month EU VAT waiver) stops.  Whether one sails their boat to Europe or buys the boat there, itinerary planning will require increasingly careful routing if sailing a non-VAT-paid boat.

 

Watching Those Exchange Rates:  Up to and shortly after the arrival of the new Millennium, the U.S. Dollar was quite strong relative to the new EU Euro, and to most individual European currencies in use before the Euro was introduced.  Meanwhile, the Canadian Dollar had been relatively weak throughout this same period but subsequently rebounded noticeably against the Euro just as the Dollar slid substantially.  We watched the USD-Euro exchange rate shift in favor of the Euro by over 30% in the single year we prepared WHOOSH for an Atlantic Crossing and subsequently arrived in the UK.  Put another way, after confirming we could afford to cruise in Europe, we actually showed up with 30% less money in our wallet, which also illustrates how an exchange rate can disqualify the whole idea of buying in Europe rather quickly.  (Ordering a new boat may require a wait of one or two years; at least a brokerage search and acquisition can be done relatively quickly).  If planning a purchase in Europe, key variables will be not only the exchange rate at the time you shop for a boat but also the timing of the payment scheme you must follow.  Be sure to discuss this thoroughly with your broker and/or builder, and perhaps your banker and/or a currency specialist back home.

 

 The ‘European Purchase’ Equation:

Time Savings + ‘Euro Ready’ + Diversity of Choice ± the VAT Issues

– ‘Quirky’ Euro Hardware – Limited non-VAT inventory – Currency Issues

= Your Best Choice?

 

Some Conclusions:  It’s fair to say that purchasing and taking delivery of a boat in Europe can raise some unique issues.  I also have the impression that, once these hurdles surface, some potential buyers are scared away – or become disillusioned as the purchasing process unfolds.  Because such issues were unexpected and are unfamiliar, they can ultimately seem insurmountable.  Actually, there are usually straightforward answers available although they may vary somewhat, depending on the country where the sale occurs and the specific boat.  It’s just that these issues tend to be outside our normal purchasing experience back home and so they can seem a bit overwhelming.  Working with a knowledgeable builder or broker especially experienced in these kinds of transactions will, from what I’ve come to learn, be a key ingredient in making the process acceptably understandable if still a bit distinct.

 

Look For A Fit:  Another impression I’ve formed is that this option inherently “fits” some sailors’ circumstances far more than others.  If you’re older and feel that “time’s a wasting” (or perhaps you are younger and can only squeeze out a ‘sabbatical cruise’ of a year or two), if you don’t currently own a boat that is suitable for an ocean-crossing Atlantic Circle, if you don’t aspire to do ocean crossings, and/or if you don’t want or need a ocean-capable cruising boat when you return home, then you might be a good candidate for exploring this option.  It might also appeal to you if you are attracted to a specific, somewhat distinct European boat - say a Swedish Malö, or French Alubat, a Dutch Linnsen Sturdy, or an English Southerly.  These can be relatively easily found in Europe but much harder to locate back home.  As mentioned earlier, the diversity of used boats here in Europe is remarkable.

 

If buying new, the purchasing option can be much like buying a Volvo or BMW and driving it around Europe for a while before shipping it home.  If buying new, the builder can coach you on the details, the boat can be stored prior to the season at the builder’s yard, and you can then enjoy their help in commissioning your new boat (and installing any special equipment you wish to provide them) before sailing away to begin European cruising.  And in either case – buying new or used – if you decide to keep the boat but do not want to sail her home, there’s always one of those well-deck transport ships that can transport her ‘as is’, rig up and china cushioned in the cupboards, from one continent to the other.

 

Suitable Candidates for ‘Buying European’:

 

One Good ‘Case Study’:  Here’s one example of how buying in Europe can work well, just to give you a ‘real world’ feel for this option.  Joe & Joy, whom we met in London in the Fall of 2003, found one another later in their lives.  Joe was the sailor, Joy took to it with relish, they married and subsequently found themselves on the U.S. east coast with a nice coastal cruising boat but with European cruising ambitions.  They felt they could afford to cruise in Europe but probably didn’t have the budget, the desire or the time it would take to prepare a boat for an ocean crossing…in truth, crossing the Atlantic was not part of the attraction for them.  What fueled the fire was the excitement of seeing Europe.

 

With some due diligence and the help of a knowledgeable British broker, they purchased an older 34’ Westerly sloop – strongly built, easily found on the used boat market, sufficiently inexpensive to fit their budget, and with VAT-paid status grandfathered due to its elderly age.  They spent the next 8 years seeing most of Europe, using the canals to transit back and forth between the UK and French Atlantic coast on one side and the Mediterranean on the other.  Each off-season, Joe would further improve the boat’s systems based on their previous (and now growing) experience.  For example, he ended up adding an aesthetically appealing and very functional hard dodger to the boat, something they probably appreciated when stretching the cruising seasons a bit more as well as when wintering aboard.  When the lure to return home to the many grandchildren exceeded the desire (and now, the physical capabilities) to continue cruising, they listed the boat with a British broker where it will hopefully find a new home quickly.  As for Joe & Joy, they exited the cruising lifestyle quick and clean, with bountiful memories and ‘no time wasted’.

 

Now that sounds like a pretty good option for some folks, doesn’t it?

 

© Copyright 2005:  Jack Tyler