A significant development is unfolding in the yachting world with the recent passage of federal legislation that brings back a powerful financial tool: 100% bonus depreciation. While headlines have focused on partisan debate, the implications for buyers of luxury assets—yachts included—are both practical and far-reaching.*
In this edition of Yachting Dollars & Sense, we break down what this means for prospective yacht owners and why timing may be key.
*At Paramount Yachts, our goal is to inform clients about how legislation may impact their lifestyle and investment decisions. This overview is provided solely for educational purposes and does not reflect any political position or endorsement.
A Look Back: The Boom of 2018–2022
Following the 2017 Tax Cuts and Jobs Act, the yachting industry saw a remarkable uptick in sales as buyers utilized generous tax incentives. Chief among them was the ability to depreciate 100% of a qualifying yacht’s purchase price in the first year, provided it was used as a legitimate business asset.
This allowed many high-income individuals to structure purchases through charter programs, using the tax savings to fund a significant portion of the investment.
100% Bonus Depreciation Returns
With the new tax bill signed into law, this incentive has been reinstated—offering eligible buyers the opportunity to:
- Write off the full purchase value of a yacht in year one
- Structure ownership through business or charter use
- Leverage financing with tax savings to offset upfront costs
For example, someone with $5 million in taxable income could potentially redirect what would’ve gone to taxes into acquiring a $5 million yacht—placing it into charter and financing the balance.
Why Timing Matters
Industry analysts suggest we’re currently near a market low, with values projected to rise over the next 12 to 18 months. As awareness of this tax provision grows, activity is expected to increase—just as it did several years ago.
For early movers, this could represent a window of opportunity before demand and pricing trend upward.
Final Thoughts
We anticipate renewed energy in the market as buyers and sellers adjust to the tax landscape. Whether you’re exploring ownership or already active in the space, our team is here to help you navigate this evolving environment with clarity and strategy.
At Paramount Yachts, we work closely with brokers, maritime attorneys, CPAs, and tax professionals to support buyers through every step—from planning to purchase to charter structuring.
Stay tuned for more insights in upcoming editions of Yachting Dollars & Sense. To connect with a specialist or learn more about structuring your acquisition, contact us today.
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