A New Wave for Yacht Buyers
In a move that’s making waves across the marine industry, President Donald Trump has officially signed the “One Big Beautiful Bill Act” (OBBBA) into law — reopening the door for major tax advantages on yacht purchases.
This landmark legislation restores 100% first-year bonus depreciation for qualified property purchased on or after January 20, 2025 — and that includes yachts. For both new and existing yacht owners, this creates an unprecedented opportunity to reduce taxable income and reinvest capital.
How It Works
Under the OBBBA, businesses can now deduct the entire purchase price of an eligible yacht in the first year it’s placed into service.
Previously, this bonus depreciation was being phased out, scheduled to drop to 40% in 2025 and disappear entirely by 2027. The new act reverses that course, once again allowing businesses to take advantage of a full write-off right away.
For example, if a company purchases a $10 million yacht and uses it 70% of the time for charter operations, it may be eligible for a $7 million first-year deduction.
Who Qualifies
To take full advantage of this incentive, the buyer must be a U.S. taxpayer — typically through a U.S.-based LLC or corporation. While foreign entities can sometimes qualify, most experts recommend a U.S. structure to avoid additional IRS scrutiny.
The yacht itself must be considered “qualified property,” which generally includes tangible personal property with a recovery period of 20 years or less. Both new and used vessels may qualify, as long as they are new to the taxpayer’s business.
The 51% Business Use Rule
The most important requirement to qualify for bonus depreciation is that the yacht must be used at least 51% for legitimate business purposes.
The most common way to meet this threshold is by placing the vessel into a charter program. If the yacht is used entirely for business, the full purchase price can be written off. If it’s used partly for personal enjoyment, the deduction is reduced proportionally based on the business-use percentage.
To remain compliant, owners should maintain detailed records of charter contracts, guest logs, and all financial activity.
Understanding Recapture Risk
While this incentive can significantly lower a buyer’s tax liability, it’s not without risk. If the yacht’s business use later falls below 51%, a portion of the deduction may be recaptured and treated as taxable income. In that case, the asset would revert to a standard straight-line depreciation schedule.
The Bottom Line
The “One Big Beautiful Bill Act” presents a rare and time-sensitive opportunity for those looking to enter or expand in the yachting market. For qualified buyers, it can turn a luxury asset into a powerful business investment — but success depends on proper planning, documentation, and professional guidance.
As always, this information is for general purposes only. Be sure to consult your tax professional to determine eligibility and ensure compliance.
