How the ‘Big Beautiful Bill Act’ Will Revolutionize U.S. Yacht Purchases for High-Net-Worth Individuals
In July 2025, President Trump signed the One Big Beautiful Bill Act (H.R. 1) into law, reinstating the 100% bonus depreciation for qualifying business assets, including superyachts and private jets. This provision, effective from January 19, 2025, has the potential to significantly reshape the yacht market in the United States, especially among high-net-worth individuals and businesses seeking to leverage tax advantages.
Under the new legislation, qualifying buyers can expense the entire purchase price of a yacht in the first year it is placed into business service, rather than depreciating it gradually over multiple decades. This means that if a buyer acquires a yacht for $10 million and qualifies for 100% bonus depreciation, they can deduct the full $10 million from their taxable income in the first year.
For an individual with a federal tax rate of around 35-40%, this could result in a reduction of their tax liability by $3.5 to $4 million, freeing up capital that would otherwise have been tied up in tax payments over several years.
While the tax savings are significant, it’s crucial to note that the deduction is not a cash refund but rather a reduction of taxable income, making it a highly effective way to preserve liquidity. The upfront savings allow owners to redirect their capital into other ventures or investments, potentially enhancing their financial flexibility.
However, securing this deduction isn’t as simple as just buying a yacht. As Umberto C. Bonavita, a partner at Robert Allen Law, explains, this process requires a highly specialized team to navigate the complex compliance and regulatory requirements.
Buyers need the expertise of a tax lawyer, accountant, yacht broker, yacht manager, and a legal team to ensure the purchase qualifies under IRS regulations. This is not a casual undertaking but a meticulously planned operation that demands professional oversight. Bonavita emphasizes the importance of structuring the yacht's use properly to avoid potential audits.
The yacht must meet several conditions to qualify for bonus depreciation: it must be used for legitimate business purposes more than 50% of the time, be flagged in a jurisdiction that permits charter activity, and be listed and actively marketed for charter. Additionally, the yacht must engage in a sufficient number of charters in U.S. waters or, depending on its flag status, non-U.S. waters.
Furthermore, a full-time crew composed of U.S. citizens is often required in specific cases, which adds an additional layer of complexity. The need to carefully document the yacht’s use and ensure full compliance with IRS regulations cannot be overstated.
This provision isn’t the first time such tax benefits have been introduced. The original concept was part of the 2017 Tax Cuts and Jobs Act (TCJA), which provided accelerated depreciation for business assets like yachts and private jets. When it was enacted, there was a significant surge in yacht acquisitions driven by the desire to take advantage of the tax benefits, especially among high-net-worth individuals and corporate buyers.
Tim Derrico, Director of Sales at HMY Yacht Sales, recalls how every December, they saw a noticeable spike in activity as clients rushed to finalize deals before the end of the year to maximize their tax savings. Given the historical success of such tax benefits, the renewed bonus depreciation in the One Big Beautiful Bill Act is expected to trigger a similar buying spree.
Derrico explains that while the impact of the tax incentive was more noticeable at year-end, the effect of this policy on yacht acquisition could be profound for the coming years. The bill has already generated significant interest from family offices and individuals who are motivated primarily by the tax advantages rather than a pre-existing passion for yachting.
Bonavita concurs with this assessment, stating that many of the firm’s active clients are now pursuing yacht purchases driven by the restored tax benefits. These clients, often from family offices or corporate entities, previously had little interest in yachting but are now drawn to it due to the tax advantages.
While this policy will certainly benefit the high-net-worth individuals seeking to offset their tax liabilities, it also has the potential to attract a new segment of buyers. These individuals, who may not have considered yacht ownership before, are now looking at yachts as both a business tool and a lifestyle investment. As Bonavita points out, many of these tax-motivated buyers often become long-term yacht enthusiasts, continuing to invest in the sector even after the initial financial incentives have been realized.
The potential for the One Big Beautiful Bill Act to stimulate the U.S. yacht market is significant, particularly for superyachts and large sportfishing vessels. According to Derrico, the current market has seen a slight slowdown in sales over the past couple of years, and there is hope that the new tax incentive will reignite interest. While it is still early to determine the full impact, the expectation is that there will be an uptick in yacht acquisitions as buyers look to take advantage of the depreciation before the deadline.
In practice, this new incentive could encourage buyers to finalize deals before the end of the year, which could create a flurry of transactions similar to the last-minute rush seen in previous years. The added bonus for brokers is that this trend isn’t limited to high-end yachts but extends to a broader range of vessels, especially large yachts and luxury sportfishing boats. For yacht brokers and dealers, the key to capitalizing on this new incentive will be to equip themselves with deep tax knowledge and provide robust advisory services.
Understanding the intricacies of the tax benefits and how they apply to individual clients will be crucial in guiding them through the purchase process. It’s also worth noting that these tax incentives are likely to drive the market toward higher-end, more expensive yachts, as the savings from bonus depreciation become even more pronounced in high-ticket transactions.
While the One Big Beautiful Bill Act promises to breathe new life into the U.S. yacht market, it also signals broader shifts in how yacht ownership is perceived. Historically, yacht ownership has been a luxury pursued by the ultra-wealthy. Now, with the tax incentives in place, yachts are increasingly seen as both a lifestyle choice and a business investment.
This dual-purpose appeal could expand the yacht-buying demographic, including those who previously viewed yachts as an unattainable luxury. For many buyers, this new wave of tax incentives could be a pivotal moment in their investment strategies. The ability to save millions in taxes while acquiring a high-end asset is a rare opportunity.
However, it’s essential for buyers to fully comprehend the regulations and engage professional teams to ensure compliance. This strategic planning will ultimately determine whether they successfully navigate the complexities of the law and maximize the benefits of the incentive.
As for the broader implications of this policy on the yacht industry, it is clear that the One Big Beautiful Bill Act could change the landscape of yacht ownership in the U.S. However, the continued success of the yacht market will also depend on factors such as global economic conditions, environmental regulations, and geopolitical trends.
The combination of tax incentives and a favorable investment climate could propel the industry to new heights, but industry players must remain agile in response to changing conditions.
In conclusion, the reinstatement of 100% bonus depreciation under the One Big Beautiful Bill Act represents a game-changer for U.S.-based yacht buyers. For high-net-worth individuals and corporate entities, this tax incentive could provide significant savings and serve as a powerful motivator for acquiring luxury yachts.
However, as the complexities of compliance and documentation underscore, it is crucial for buyers to approach this opportunity with meticulous planning and the right professional guidance. With the right strategy in place, the One Big Beautiful Bill Act could be the key to unlocking new opportunities in the U.S. yacht market.