The Ultimate Guide to Boat Ownership
Written by Carolyn Jackson
Boats are fun, they said. Boats are a great family activity, they said. Boats are hard work, no one said. Yes, to all. Boats are a lot of fun and a wonderful way to spend time together as a family, but what they might not have mentioned is the work that comes with owning a boat.
Don’t worry though, the fun outweighs the work tenfold and our ultimate guide to boat ownership is here to help. This article will get into some of the questions you didn’t even know you needed to ask. We will cover key items like getting a boat license, maintaining a boat, boat taxes, and more.
The purpose of this article is to prepare you for the reality of boat ownership. Like any other first, you don’t know what you don’t know, so read along and become a fast expert on boat ownership.
Key Takeaways:
- Prepare to invest in your boat. The initial cost is just the first payment into maintaining and owning a boat.
- Boats require routine maintenance to stay in pique condition for years.
- Some states require a boating license, and some do not.
- Some states have property taxes on boats, and some do not.
- Always be prepared and knowledgeable on boating safety when becoming a boat owner.
Table of Contents
What Does It Cost to Own a Boat?
Before you sign the papers at the dealership for your first boat, here are a few things to know:
There are additional costs associated with boat ownership, including but not limited to:
- Insurance
- Dealer Fees
- Storage
- Winterization
- Taxes
- Registration
- Boating License
- Trailer
- Maintenance
- Gas
- Safety Equipment
Some of these costs are a one-time fee such as the dealer fees and trailer, but others
will occur more frequently, like the cost of gas and storage fees.
1. Practice launching and retrieving your boat with a trailer. For more information on boat trailers, which ones to buy, how much they cost, and how to use one, look at our Guide to Boat Trailers.
2. Know what you want and what you need before you walk into a dealership. There are hundreds of boats on the market, all ranging widely in price, size, brand, style, purpose, etc. Do some research ahead of time on the type of boat you want, how much you can afford, and what size would fit your needs. Take a look at our Complete Guide to Buying a Boat to get an idea of the types of boats available, some of the top brands, and how much they cost.
Looking for the cost of a specific type of boat? Check out our in-depth articles that cover how much a pontoon boat, yacht, or even a jet ski costs.
3. Invest in the proper equipment for your boat. The equipment you need will largely depend on the type of boat you purchase and how/where you use it, but here is a general checklist to start with:
- Dock lines
- Floating devices, enough for the passenger capacity
- Visual distress signals (e.g., flares)
- Audible distress signals (e.g., air horns, whistles)
- A VHF radio
- First aid kit
- Oars/paddles
- A heavy-duty flashlight
- A basic toolbox
- Extra light bulbs, fuel filters, etc.
4. Consider where you will store your boat before you buy it. The dock or marina you have or want access to might have restrictions on size, height, or engines. Do some research ahead of time to ensure you will not run into any storage issues after you purchase a boat.
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Who Needs A Boat License and How Do I Get One?
Boating license requirements differ from state to state. Check out this guide on requirements by state from NASBLA. Typically, if a state does require a boater’s license, the individual will need to take some online courses, pass a few tests and then register to receive the license in the mail.
Most of the exams needed for a boater’s license are administered by a third party, like NASBLA. These third parties often will charge a fee for taking their course, which is usually charged after you’ve completed the course. There might also be an administrative fee. A great resource is BoatUS, which offers free boating safety courses in 35 states.
As a boat owner, you will need to research what the requirements are in your state and how to obtain the required licenses and education to safely and legally operate your boat. For more in-depth information on how to obtain a boater’s license, take a look at our Comprehensive Boating License Guide.
How Do You Maintain a Boat?
As we mentioned above, owning a boat requires consistent upkeep and maintenance to ensure your boat runs smoothly and primed to last years. Just like you maintain your car with exterior and interior washes, oil changes, and tire rotations, boats need similar care.
The two most important things to remember when taking care of your boat are keeping it clean and lubricated.
Keeping Your Boat Clean
Keeping your boat clean can be as simple as washing and waxing the exterior, drying and wiping down the interior, and proper storage. Storing your boat out of the sun and other elements can work wonders for increasing its lifespan. Make sure you invest in a fitted cover and get in the habit of putting it on every time you get off the boat, or inclement weather is approaching. If you have access to a covered dock, that would also be ideal. Additionally, proper storage during the off-season is crucial for the health of your vessel. We will discuss winterizing your boat later, but remember to have a plan in place for the colder months of the year.
Keeping Your Boat Lubricated
Just as you need to change the oil in your car, you also need to change and maintain your boat’s oil. Try to stay on a consistent schedule with changing your boat’s oil. Waiting too long between oil changes can cause engine damage. In addition to changing the oil, make sure to periodically check other fluid levels such as power steering fluid and the coolant.
Other Routine Maintenance Items
In addition to the big two mentioned above, there are some other things to keep a close eye on as a boat owner. Here is a list of things you should routinely check on your boat:
- Engine
- Propeller
- Battery
- Bilge Pump
- Electrical Lines
- Oil and Filter
- Fluid Levels
- The Hull
Are There Taxes on Boats?
The good news is that there are no federal taxes on a boat purchase. However, there are state and local taxes you might have to pay as a boat owner. Remember, you will need to research the applicable taxes for where you buy the boat, where you store the boat, and where you cruise the boat. There are three taxes you might encounter as a boat owner:
- Sales Tax
- Use Tax
- Property Tax
Sales Tax on Boats
Sales tax varies widely by state. Some states have no sales taxes, some have sales tax in the 7+% range, while others cap the amount of the purchase you pay taxes on. Some states have lower sales taxes instead of an additional local sales tax. The moral of the story is that sales taxes vary, and you will need to research the sales tax laws in the state where you purchase the boat. You should not pay sales tax in multiple states.
Use Tax on Boats
If you do not pay a sales tax when you buy the boat, you will likely need to pay a use tax on the boat in the state of use. If this is the case, it might be worth your while to do some research on neighboring states that offer lower use taxes and then register your boat in that state. The use tax is a one-time fee, due at the time of registration of the vessel, usually 3-6 months after purchase.
Personal Property Tax on Boats
Many states have an annual personal property tax required if you own any assets registered with the state, including but not limited to boats, cars, planes, RVs, homes, etc. Personal property taxes vary widely by state in requirement and percentage.
Tax Deductions for Boat Owners
There are two main ways you can claim a tax deduction as a boat owner:
- Deduct mortgage interest on a second home
- Claim your boat as your primary residence
If you claim your boat as a secondary residence, you can deduct interest paid on the loan from your annual taxes. Laws cap these deductions at $750,000. The IRS will need proof that the boat is habitable “as a home,” e.g., does it have a bathroom and a bedroom and running water?
If you claim your boat as your primary residence, you may receive all the tax benefits of being a homeowner. The IRS will need some information from you to categorize your boat as a primary residence, including a full kitchen, a bedroom with a closet, a full bathroom, and proof of permanent residence in the vessel.
How to Winterize Your Boat
If you live in the northern hemisphere, you will likely need to store your boat for the winter when temperatures drop in the winter. There are a few steps every boat owner needs to take to ensure their boat remains in good condition while sitting unused for a few months.
There are five easy steps to follow when you are ready to winterize your boat:
- Clean everything
- Prepare the engine
- Winterizing the freshwater and wastewater systems
- Winterizing the cabin and interior
- Cover and store your boat
Pro Tip: Moisture is public enemy number one for boats in the winter. The goal of winterizing is to take out any liquid within the boat to not expand when it freezes, causing damage to pipes, tubes, and other parts of the vessel. Even if temperatures rarely drop below freezing, it only takes one day for the moisture to freeze and cause costly problems.
For more detailed instructions on how to winterize your boat yourself or how much it costs to have a professional do it for you, take a look at our Ultimate Guide on How to Winterize Your Boat.
What Do I Need to Know about Boating Safety?
Boating safety is paramount. As the owner and likely the operator of your boat, it is your responsibility to ensure your passengers’ safety and those around you on the water. If you have not taken a boating safety course covering the “rules of the road,” enroll today. There are some basic principles about operating a boat on open water-related to passing, signaling, crossing, overtaking, meeting, etc.
Another consideration for boating safety is having the proper equipment, which we mentioned above in more detail. Always double-check that all the equipment required is aboard before setting sail.
One of the best safety advice we can offer is to use common sense when operating a boat. Be mindful of the rules and regulations of the water, the capacity and capability of your boat, the weather, follow the speed limit, be mindful of buoys, and steer clear of large vessels, etc. Do not operate a boat under the influence and have a plan if something were to go wrong.
To Sum it All Up
Boating is one of the most enjoyable, fun, and relaxing pastimes. Although there is a lot of work and education involved with boating, these things will become second nature as you become more familiar with and knowledgeable about the marine world. This article aims to prepare you for the reality of owning a boat and to help you understand what goes into ensuring you are safe and your boat is cared for. Pro Tip? The better care you take of your boat, the longer it will last (and you can avoid those sales taxes for longer!).
Hopefully our ultimate guide to boat ownership has helped you get ready to get out and enjoy your boat!
Happy boating!
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