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Cruising the world’s waters in a private floating palace has become quite the status symbol among the mega wealthy. Nothing screams 'success' quite like owning a giant, lavish superyacht, though purchasing one certainly isn’t as simple as picking your favourite from a brochure!
To join the club of superyacht owners is not to make a smart financial investment; it's to make an investment in joy, happiness and status. The superyachts of today are stacked to the brim with extravagant amenities and annual running costs can easily reach - and exceed - seven figures.
The overall cost of owning and running a superyacht comprises of costs and expenses from dozens of areas; the cost of the yacht itself is merely a small piece of the puzzle. From staff salaries and insurance to having somewhere to berth, there are many costs and financial decisions to consider with superyacht ownership.
We cover some of the main financial considerations of superyacht ownership below. Read on to see how much your dream superyacht could set you back...
Choosing the yacht’s flag state is one of the most important decisions a new yacht owner has to make. The flag state bears the authority and responsibility to enforce regulations over vessels registered there, which in turn has large implications in areas such as tax obligations, liability in international waters, privacy, and whether or not a yacht can be operated as a commercial enterprise.
The Cayman Islands and Marshall Islands are popular with yacht owners for their liberal tax laws, as are Gibraltar and the Isle of Man.
At the most basic end of the spectrum, normal running costs of a superyacht include fuel, maintenance, crew salaries and mooring fees. Of course, no good yacht is a worthy place to spend time without access to some of the best water toys on the market. This does, however, increase running costs and safety considerations.
Generally, running costs of a yacht are roughly estimated at 10% of the purchase value. In reality, the full amount can quite easily become more than that. The operating cost of a vessel can be estimated with the help of an operating costs calculator, such as this one from LuxYachts.
Be it a prestigious port or picturesque harbour, superyachts often need to be berthed somewhere when they’re not in use by the owner or guests - and in the high season mooring fees aren’t cheap.
Berthing prices vary from port to port around the world, but anchoring your vessel at the most exclusive marinas in high season can set you back well over €3,000 per night. How often, and where an owner berths a yacht, has a huge impact on annual expenditure (read more about yacht berth pricing and supply.
When it comes to spending money on the yacht itself, there are thousands of prestigious manufacturers and models to choose from. Generally, features and customisation are only limited by the owner’s imagination. Essentially, anything is possible.
A wide range of considerations need to be made, incorporative everything from style preferences and cruising requirements to the amount of guest accommodation. As such, a potential owner will need to consider whether to purchase an existing vessel, or to go new build. This in itself prompts further decisions to be made - do you choose a semi-custom yacht being built to specification on an existing platform, or a full-custom design from scratch?
Existing yachts can help new and existing owners to try a wealth of innovative features and designs before they buy. As such, it’s widely recommended that owners step on board or even charter a variety of yachts in a range of styles to gather ideas for their own purchase. This can be done with the help of the industry’s yacht purchase and charter brokers.
In fact, many would-be superyacht owners are beginning to shun ownership in favour of regular chartering in the face of increasing costs and the high levels of maintenance required to keep a superyacht operating effectively. Though, many feel that part of the ultimate yachting experience is owning the yacht itself. With this in mind, chartering can lead to smarter financial decisions when it comes to purchasing what is likely the largest ongoing investment many UHNWIs will make.
Several banks and marine lenders will finance the purchase of a superyacht, either via a leasing transaction for a fixed period (referred to as a “demise charter” or “bareboat charter”) or via a marine mortgage, registered on the yacht in her flag registry. Generally 10% to 20% of the yacht purchase price is paid at the outset of deposit, and owners typically flip their vessels every three years. This method of ownership is very common and holds many advantages, particular with regards to taxation.
Superyacht ownership is a large financial commitment and one that can be difficult to justify - beyond doing so for pride, status, and complete freedom. If a prospective owner has their heart set on the purchase, then they must invest smartly. This requires: Proper research, hiring a good broker or professional team of advisers and chartering for inspiration. When they feel fully informed on the costs and settle on the idea of ownership, the purchase is sure to bring unbridled joy for many years to come.
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