Blue water cruising on catamaran: focus on financing

BUYING A CATAMARAN - the most popular solution
Whether new or second-hand, buying a catamaran which is going to be with you for the years ahead is the most logical solution (see the following pages for the choice between new, second hand or a catamaran at the end of a management term). All that remains is to finance it. And in this instance there is a “magic” product which in some situations can make for substantial savings, and that is leasing or LPO. The Lease with Purchase Option financing is available to residents of the European Community and Switzerland. You can buy a new catamaran through leasing, but it is equally possible to buy a second-hand catamaran with this type of financing, on condition that not all of the VAT (tax) has been paid. For this, it means that the purchased boat belongs to a company (for professional use), or that is already in a leasing program. In theory the LPO can only be applied to a catamaran equipped for offshore sailing. If you are a European or Swiss resident and your catamaran is available in French waters, the French tax authorities allow, within the framework of the LPO, VAT to be charged at 10% instead of the normal 20% on rental. But note that this allowance is only relevant to the charter income, and not the purchase of the catamaran. To buy a catamaran without VAT you will have to set up a company, and therefore make the catamaran “work”… Getting back to our purchaser: there’s going to be a company which will buy the catamaran of his dreams, and then rent it to him for x number of years (on average between 8 and 12 years, as would be the case with Capitole Finance-Tofinso or Groupe Caisse d’Epargne, for example). If the plan is to head far away and see coconut groves, and the catamaran is leaving European territorial waters, the rental can be completely exempted from VAT. The LPO has other advantages, as explained to us by Frédérique Desarnauts of Capitole Finance Tofinso: “the lending company is the owner of the catamaran, and also its value is not taken into account for the chaterer’s ISF tax base (ISF is a tax on wealth, for French residents with assets over €1.3M)… Finally, leasing is easily terminated, with the agreement of the lender, and this greatly simplifies the resale of the catamaran.
The LPO is therefore a flexible product, financially and fiscally advantageous, even if you are not immediately the owner of your catamaran. But isn’t the most important thing to be able to enjoy and sail your catamaran!?
This system is so advantageous that today almost 100% of new catamarans go through leasing, and provided that a second-hand catamaran belongs to a company, it is also by leasing that it will be financed… Vendors are wise to this situation, and systematically suggest it. Nevertheless, legislation continues to evolve in this area, so it would be prudent to get advice from a financial firm specializing in the maritime field. Moreover, their expertise could help you optimize your purchase, ...