Thinking of buying a yacht in Greece? There are bargains to be had, especially at the end of the yacht charter season. But there are pitfalls to be aware of too.

The majority of Greek yachts listed with brokers are former charter yachts, known as Greek professional yachts. Some people shy away from them, believing it equivalent to buying a second-hand vehicle from a car hire firm. Not all charter yachts are ill-used or poorly maintained.

In fact, a lot of the professional yachts in Greece are owned by individuals rather than yacht charter companies. The owners charter them out in order to benefit from VAT and other tax advantages.

Often the owner will charter for the minimum number of days required to retain professional status and cover the annual mooring and maintenance costs of the yacht.

If you are prepared to spend time looking around you will find a big difference in the appearance of yachts of the same age, with some looking 'tired' from heavy use while others seem years younger.

THE SURVEY

Having found a yacht you want to buy you should have it surveyed by a professional surveyor. It is not unknown for a charter yacht to suffer major hull damage, be patched up by an unscrupulous owner, and then offered for resale.

"Buyer Beware" should certainly be your motto.

A survey will not only protect you from buying a boat with technical problems but it is also required by most insurance companies. You will pay 500 - 1500 Euro for a survey.

GREEK FLAG

99% of Greek professional yachts are Greek-flagged. If the boat is flagged in another country then the rules of that country will apply and you need advice from a qualified broker.

If you are not a Greek citizen or an E.U. citizen resident in Greece you will need to change flag if the boat is intended for private use. You can keep Greek flag if you have a yacht charter business in Greece.

SALES PRICE

We were once advised never to pay a Greek the price he asks for anything, as he will always expect you to bargain...

This is certainly true when it comes to boats. You should be able to negotiate down from the initial asking price. A good survey may give you ammunition for this, as few used boats will be without any defects.

The surveyor should be able to advise you what the 'going rate' is for the type of yacht you are interested in.

Some brokers in Greece do not work on a fixed commission basis. They will agree a price with the owner that he/she will accept. They then try to obtain as high a price as possible from the purchaser. Their commission is the difference. The extra they add to the 'owner's price' can be quite considerable and leaves plenty of scope for negotiation.

VAT

Greek professional yachts will have been purchased VAT exempt. If you are an E.U. national, you will be required to pay VAT on the current value of the yacht in addition to the purchase price.

The VAT rate in Greece is 19% but often you can negotiate with the Seller and it is not unknown for deals to be reached where you pay only an additional 5% and the Seller handles the payment of the remaining VAT.

You may be exempted from payment of VAT if you are involved in commercial activity that includes yacht chartering.

If you are not an E.U. Citizen you will not need to pay the outstanding VAT, but you will require the yacht to be custom cleared from the E.U. This takes several days and costs about 600 Euro.

TYPICAL PURCHASE PROCEDURE

Having found a yacht, you negotiate a price with the broker and reach an agreement. You should be supplied with an inventory for the yacht so you know exactly what is included in the sale.

You need a solicitor to act for you during the sale. Your solicitor will protect you by ensuring that there are no encumbrances or debts on the yacht, and that the ownership situation and titles are clear.

The solicitor will prepare an M.O.A. (Memorandum of Agreement) stating all the details of the transaction, including terms, dates and payments, and what comes with the boat. This Memorandum should be conditional on a survey. The M.O.A. is signed by both Buyer and Seller.

You arrange a survey of the yacht and, on the basis of this, either agree the price, re-negotiate, or in some cases the wisest action may be to walk away!

You normally pay a deposit of 10-20% of the purchase price to your solicitor as soon as possible in order to have a legally binding agreement. Your solicitor will pay this to the seller after all the necessary documents have been handed over to him.

You must send the balance of the purchase price to the solicitor in time to comply with the provisions negotiated when drafting the Memorandum of Agreement. The solicitor will pay the full purchase price to the seller only after he has made sure that all legal and tax requirements have been taken care of by the seller and after all required documents have been handed over to him by the seller.

As part of the sales process the yacht will be deleted from the Greek registry. Upon deletion an official ownership certificate will be issued from the Hellenic Registrar of Shipping. The certificate will confirm that the boat is free from encumbrances and liens.

In the meantime you can arrange registration for the boat in your country.

After completion of all the paperwork you can take over your boat here in Greece or you can arrange to have it delivered to wherever you intend to keep her.

You can only sail your yacht after a Bill of Sale has been issued and officially signed by both Seller and Buyer and the Deletion Certificate has been issued. Buying a yacht can be a fairly lengthy and bureaucratic process here in Greece but many of the procedures are there to safeguard your interests and ensure the yacht is free of debts or any other financial burdens.

Do not be tempted to take any shortcuts or accept any bits of paper presented to you by an eager seller supposedly to speed up the process.