Cap Ex

What is Cap Ex in yachting?

Cap Ex - short for capital expenditure - is the spend a yacht owner commits to acquiring the vessel and to the major, long-lived works that preserve or enhance its value. The defining test is whether the spend creates or restores an asset with a useful life of more than one year. If it does, it is capitalised on the balance sheet and depreciated over time; if it does not, it is OpEx and expensed in the year it is incurred.

On a superyacht, Cap Ex falls into three recognisable bands. Acquisition is the largest single line: the purchase price of a new build or brokerage yacht, plus capitalised commissioning costs, owner's supply items and pre-delivery refit. Periodic major works are the predictable five- and ten-year items - full hull repaint, engine top-end and major overhaul, generator replacement, tender and toy renewal, electronics and AV refresh. Discretionary upgrades are the owner-driven items that extend life or lift resale: interior refit, exhaust silencing, hybrid retrofits, zero-speed stabiliser upgrades and tender garage conversions.

The accounting treatment matters. Routine maintenance, crew salaries, fuel, insurance, dockage and consumables run through OpEx and hit the operating budget in-year. A planned drydock that replaces shafts, repaints the hull and rebuilds main engines is Cap Ex, capitalised and depreciated - and reported separately from the operating account.

Why it matters for yacht owners

Cap Ex is where the real money in yacht ownership lives, and where deferral is most expensive. A mid-life refit on a 30 to 50-metre yacht typically runs roughly €10,000 to €30,000 per metre of LOA, with full repaints alone reported at €200,000 to €500,000+ on a 45-metre hull and engine overhauls at €150,000 to €500,000+ per engine. A planned, documented Cap Ex schedule preserves resale value; deferred Cap Ex compounds - surveyors flag it, brokers discount for it and buyers price it in twice.

The second reason owners care is structure. Cap Ex is capitalised and depreciated rather than expensed, which changes how it shows up in yacht accounts, in any charter-business P&L and in jurisdiction-specific tax treatment. The owning structure, flag and use case (private vs commercial charter) all influence whether - and how quickly - Cap Ex can be depreciated or written down. Tax treatment varies materially by jurisdiction; owners should consult a qualified tax adviser before relying on any depreciation outcome.

Key facts

• Cap Ex covers acquisition, major refit, repower, repaint and engine overhauls; OpEx covers crew, fuel, dockage and routine maintenance.
• Drydock cycles typically run on a five-year rhythm, with major refit at roughly ten years.
• Mid-life refit budget guide: €10,000 to €30,000 per metre LOA on a 30 to 50-metre yacht.
• Full hull and superstructure repaint on a 45-metre yacht: roughly €200,000 to €500,000.
• Engine overhaul: €50,000 to €150,000 (sub-800 hp), €150,000 to €300,000 (1,000 to 2,000 hp), €300,000 to €500,000+ (2,500 hp+) per engine.
• Classed yachts must document Cap Ex works for class and flag-state survey records - incomplete records hit resale.
• US IRS Section 179 and bonus depreciation may apply where a yacht is held in a business entity and used >50% for legitimate business - subject to entertainment-facility restrictions and qualified tax advice.