Import tax (GST)and Customs Valuation in Australia

I know nothing of this. But, how would they find out about your refit? Why not do everything on the refit except paint the exterior. Then have it painted once it's there. If people see a yacht with poor exterior paint, they generally assume all of it is old.

Welcome to YF JLAUST.
I have brought a few boats over from the US and never had an issue.
Be as honest as is reasonably possible...in other words, if you are going to spend another $700,000 on a $800,000 purchase, I would not put down the initial purchase price of the boat on the form. Be reasonable.
You will be up for GST (10%) on insurance, shipping and other costs involved in the transaction. However, I doubt very much that a customs agent will board the vessel and estimate the cost of a refit. As long as you don't push the envelope to the extent where a blind man can see through the mist.
Keep receipts and how you get them and the sums thereon are your concern!

A big issue when importing is AQIS. Which is Quarantine. they are extremely concerned about importing pests from the US (meaning BUGS, not citizens) or South America, Asia etc. So make sure the timber used in the refit is in good order. Same with the original fittings. Avoid getting an insecticide spray in the US as it is likely the Australian Quarantine will not be satisfied with it and demand another treatment, plus the chemicals can be a problem with wiring and headliners over a long period.
For the easiest and safest way to satisfy AQIS, hire Elders Pest Control and INSURE that you get the Beagle DOG to go through the vessel. I don't kid you.
When I imported my 58' Offshore, I refused to have the tent over the boat or allow the authorities to spray poison. Imagine the affect of this on my family and the boat fittings over the years!
Instead I stood my ground and finally AQIS accepted the Beagle going through the boat and finding no termites or other bugs.
By the way, the guy who I bought the Offshore from was a true gentleman. We got on extremely well during the transaction and he found out that my wife and I enjoy good wine etc. So he filled the boat with the finest (really!!!) French and Californian wine plus LITRES of good rum and whiskey. As it turned out, I was on board the boat when it was craned off the cargo ship and my friend (crew) and I went direct to the Marina in Mackay, North Queensland. First thing in the morning we fuelled up and set off for the Gold Coast. About 2 days into the trip I get a call from Australian Customs asking me where I was, they wanted to go over the vessel and check it! I politely said where I was and they "ordered'" me back to Mackay. I refused and "asked" them to meet me at home on the Gold Coast. It was their stuff up and they knew it. It all ended happily. HIC!!!
Good luck Mate. If I can be of any assistance, just PM me.
Cheers,
George

The law/regulations look very clear to me. Now that doesn't mean the implementation of them is consistent.

Privately imported yachts are generally valued using the transaction method of valuation when purchased overseas new or second-hand for export to Australia. Circumstances where we may use an alternative method of valuation include such situations as where:

-the yacht was constructed by owner/labour;
-the yacht has been extensively modified since purchase;
-the purchaser and vendor are related parties and that relationship has influenced the purchase price; or
-the original purchase price is too far removed in time.

In these instances the yacht will have to be valued by a marine surveyor in Australia. This valuation will be based on the market value and as such will include elements such as customs duty and GST. We'll have to deduct these elements plus overseas transport from the local valuation.

Where the yacht is sailed to Australia, overseas freight will be determined having regard to essential sailing costs incurred under the most commercially viable conditions. Such costs would include sailing expenditure necessarily incurred while the vessel is actually sailing (and entering and leaving) those ports of call on the most commercially viable route. It would not include any in port expenditure related to the vessel's period of stopover.

Where supported by sufficient/reliable information, essential sailing costs would also include:

-cost of maps, charts pilot books, light/radio lists, etc.
-crew's hire/wages or forage allowance in lieu
victualling or food costs (does not include tobacco and alcoholic beverages)
-bunkering or oil/fuel costs.

This is an indicative rather than exhaustive list, if you have any doubts or queries seek further information from a Customs Information and Support Centre 1300 363 263.

It really seems straight-forward to me. It's generally purchase price but in circumstances such as yours or any other where the purchase price is not indicative of the true value then it's market value as determined by a surveyor in Australia.

You pay based on the value of the boat when imported. It seems that the only issue is you just don't like the answer. I think Kafue's advice was good, a reasonable valuation. But you start playing games with the valuation and you're at significant risk in attempting to avoid a legally due tax. The information I posted is directly from their web site. Tax is due on the value of the imported boat. There's no ambiguity in that regard.

I'd also like to add that a 10% tax really isn't a whole lot in the scheme of things. Quite honestly a $1.5 million refit on a $800k vessel is not going to make the vessel worth $2.3 million (majority of the time). Will it make it worth more, yes. So basically they will tax the boat on what it is honestly worth - all shipping expenses. Kafue has imported several yachts to Australia and told you to give a relatively honest valuation on what it's worth, pay the tax on it, and you shouldn't have any problems. If you try to be greedy and steal from the government then you will generally get bitten in the behind.

I have watched this thread with interest as I was somewhat curious as to the sense of spending almost double on a boat that you paid for it regardless of any further costs of transport or import that might come along later.

Both Capt J's and K1W1's comments bring up good points. Ok, you buy the boat for $800,000, Spend $1,700,000 refitting it. Spend $100,000 shipping it. Now it's worth perhaps $1,500,000 so you pay tax of $150,000. That means an additional $70,000 based on the refit. Now it could survey higher but doubt seriously it would sell for more, and certainly not what you have in it. Seems like the additional $70,000 would be a very minor concern compared to the entire exercise.

May we ask what sort of boat you are looking at?

Well, how you choose to spend your money is your business except then don't come trying to figure out a way to escape appropriate taxes. I seriously doubt on that boat they will value it anywhere near what you spend on it.

That said, I can't grasp spending $2.5-2.8 million on a 45 year old 27 meter boat.

I can on an ABS/ICE classed expedition yacht. That boat was built to a standard way above normal yachts. Think of something like Bart Roberts. It's a ship and not a yacht. So to spend that kind of money to make it a yacht could be worthwhile and it's a true "go anywhere" expedition yacht. When you compare it to let's say a new Nordhavn of the same size, for 3 times the amount, and you still don't have an ice-classed yacht.

I would be very wary about taking on something that age, if it were built for the Navy you might find yourself in a very costly and time consuming Asbestos removal before you can start any of your planned refit/upgrades.

Regardless of how well it was built there has been 45 yrs of wear and tear on it, don't fall in love with an impossible dream, there are examples of this to be found the world over languishing in yards

Oh... up late and reading about my favorite subject... taxes. I have no information or experience in Australian taxes. But makes one wonder about registering offshore might be a solution. Also, there are refit yards in AU so why not buy cheap... get it to AU import and pay then do the refit.

In the EU and France you can shop the tax situation. However, my preference is to pay for the services of a Notaire and and pay the tax at the time of purchase using those services. Doing it that way guarantees the taxes are correctly and fairly paid for the purchase when it is purchased... and the Notaire's seal has the authority of Court's Order. The have in the US terms the authority of a Superior Court or a Federal District Court or the Tax Court in matters of property, inheritance, business assets, business / Corporate law and taxes for acquisition and property... but though they are publicly sanctioned they are private entities and actually handle the legal aspects of the transaction as a service... best of both worlds. The other advantage is the seal has the effect of the effect of insurance as to mistakes in money... they mess up and they pay! Besides I have learned my lesson... after getting a boarding tax inspection and getting caught out... no more.

Generally, tax authorities love to get a chance to appraise value and it can be less or more depending on the individual situation. I find it is get it done at time the money changes hands... there can be no question of Fair Market Value.

Now I think with that advice you should have a reality check! The Asbestos issue is something that I and most of us would never have considered and may well be the reason this vessel is for sale at such an attractive price, at least to you. Having been in the construction industry fo many years, I know how strict the regulations are regarding the removal of this material. On a large yacht, the costs would be enormous, or worse still, you may not be allowed to import it at all.

I won't make a judgement on whether it makes sense to spend twice as much on a boat to refit it to your needs as there is very little "sense" in boating, except to us "fanatics" who stopped counting costs for sanity sake.
There is a Huckins for sale in Florida that I have been considering for over a year that I would be spending at least double the purchase price on a refit, IF only I could convince my wife to go to a classic 72' yacht.

As to the tax concerns you have, I believe that the more you complicate and manipulate the issue the worse it will be for you. In Florida there is a tax similar to our GST, unless the vessel is being exported (not sure about the other States). So how will you get this rebate if you don't declare the US costs on your Customs documentation?

Also in case you are not aware, when you make a false declaration on your Income Tax Return it is illegal and you will be heavily fined, BUT, when you get caught not paying GST, that is a criminal offence and far more serious.

I'll stick to being an "accidental bootlegger" (just in case a Customs officer is trolling this post...), as happened with the import of my Offshore. The allowance for alcohol is a few litres, yet what was on the boat when I accidently shoved off from the cargo ship, was enough alcohol to last us 12 months! Followed by a long dry out session.

I quoted the rules as they exist and to put my comment into perspective I said, "The law/regulations look very clear to me. Now that doesn't mean the implementation of them is consistent." And I later said "The information I posted is directly from their web site. Tax is due on the value of the imported boat. There's no ambiguity in that regard."

There is no ambiguity in regard to the fact the tax is on the value of the imported boat and in a case like yours that is "as determined by a marine surveyor." I also gave you the number to call. So very definitively some of your questions were answered. No, it can not be valued in the US prior to the refit. Yes, it is based on the value upon arrival in Australia after all refit costs. I also posted separately that the value very well might be less than what you spent. And I gave you the number to call. The answer as to how the regulations read is clear and seems you just don't like that so lash back at the one who took the trouble to actually find the definitive answer on their web site. I also noted that the tax you're so wanting to "minimize" is very minor in terms of your total expenditure on the boat.

Now, like any marine survey the resulting value may be one you disagree with, but the fact remains that the regulations read with extensive refit a marine survey upon arrival in Australia. Very straight forward. I can't help it if you don't like that.

Now in the years it takes you for the refit, who is to say the regulations won't change. Good luck with the purchase if you make it.

It's real simple, after it is refit in the US have a well known and accredited marine surveyor come out and assess the boat a real world value in writing, if it's the same surveyor you used for the purchase, then generally they don't charge a whole lot to basically look at what you updated and give a value. Most all of the customs agents are pretty fair and so long as your fair with them.

You could come across an overzealous police officer who falsely arrests you driving down the street, and it does happen I'm sure, but the odds of it happening are extremely slim.

The only suggestion I can add to the excellent advice already provided is whatever information you get from any Australian authorities, get it in writing with any necessary specific offered interpretation of the information also in writing so IF an issue arises you have a hard copy of both the information and the interpretation on hand. The courts don't really react well to hearsay.