Buying an airplane and keeping it on US registration
 

Hey everyone,
I wanted to ask for those who own an airplane, but more so - own them on N registration (US) and live in Canada. I used to know bunch of people that does that.
I want to ask - How did you go about doing that?
The reason I'm wanting to do this is to avoid the, forgive my language, but stupid Canadian bureaucracy, but more so the WAY over expansive taxes (sales tax + the "luxury" tax). I don't want to convert it to Canadian registration, just keeping it on the US one. I have my FAA CMEL with IR and current class 1 medical, but also because I saw Piper Seneca sold in the US for the price of a 172 in Canada.

Anyone has ever done this or know someone who did? I knew people who did it in the past but never kept in touch with them.

I think that you'll find that there are customs restrictions on how long a US registered airplane can remain in Canada. That said, I think that if you pay the import duty on it, the customs people might relax.

Remind yourself that the " " Canadian bureaucracy offers some ownership options for airplane cost saving that the US does not. each is different, and I have no problem with the Canadian system, having owned more than one airplane in Canada since 1987.

As for low cost Seneca, vs more expensive 172 - yeah, I see that! Depending upon the year of the Seneca, it may be very poorly supported compared to the 172. Literally, when I spoke to Piper years back about a client's Seneca I, and the absence of a required primary structure part, the response was that they would not support the airplane with this part - period. The part had to be custom made and approved for the return to service. With legacy airplanes, you'd better do your homework! I've been consulting with a customer recently maintaining a light twin. For want of a very unavailable nose gear actuator, the plane is grounded indefinitely, and with a very large bill (probably 5% of the value of the whole plane) for one, if/when it becomes available. Select the most common legacy airplane you can find - there are way more parts out there to keep it going!

If you really feel that you must have an N registered plane, well, the border is only a few hours drive, best to keep it on the other side!

Why pay custom? You only pay that if you registered it in Canada.
Also, by avoiding the registration, as I mentioned, I also avoid the "luxury tax", which is 15% of the price of the airplane, on top of the Sales Tax, which is a LOT. That helps a LOT.
Also 2.0, I have, by far, more A/P on the US side with way more availability, Vs. what I have for AME in Canada, so that is a huge factor.

But on a different point, you said Piper Seneca shouldn't be a consideration? The school I used to fly with, had a 1983 Seneca III Turbocharged certified for icing conditions with full A/P, and the owner keep using it in icing conditions, and it works great. I'm just trying to understand as I really loved that Seneca (having counter-rotating props and being turbocharged is amazing - nearly always adequate climb performance on a one engine and no turning tendencies, whether it's two or one engine), and saw it in affordable prices.

I suggest you go back and reread PilotDar's post as they explained why they wouldn't recommend the Piper Seneca. It wasn't because the airplane was horrible too fly or anything like that. It was a case of real life experience in finding and purchasing replacement parts should something break or time-out.

I don't know the Canada customs rules, and they may have changed since I last brought a U.S. plane into Canada (so check for yourself). But, I have brought back three airplanes for import to Canada over the years ('flown two, containered the third), and, as a Canadian, I was required to pay the duty on the airplane as it entered Canada. I know that you state that you do not intend to import, but I recall it was simply the airplane entering the country under the ownership of a Canadian which aroused the interest of customs. Do your research before you commit.

As for the Seneca, I don't know a lot about the III's, though I know that the couple of I's I was involved with posed ownership challenges from an aging/maintenance perspective. You'll see "deals" on twins compared to singles, ask yourself why - cost to maintain and operate. In Cessna terms, you can often find a nice '70's 310 for less than a '70's 210, look at the maintenance and operating cost comparison, and the clues are there.

Luxury tax? Well... is a $100,000+ dollar airplane a luxury? I've always given advice to buyers to determine your total budget, and then spend half that on the airplane, to leave the rest for all the other costs to operate it for the first year - it seems to work out. And, I have seen some airplanes purchased, which just seem to sit (I flew over two I know of just the other day) -owner ran out of funds, airplane sits, and becomes less valuable.

It's been exactly 15 year since I have imported a plane, so maybe the rules are different now. But that one, (182Q through Vancouver) had to have the duty paid, before customs would return the log books to me. I paid the duty and taxes, and they had no more questions of me. I flew it here for months before I deregistered it (propeller over life for Canada, but U.S. still okay). Perhaps someone else here has more recent experience...

So the luxury tax is another gift of the liberal party, the gift that keeps on giving. Anything with a purchase price of $100,000, with the exception of few items (like a transport truck), and that is on top of the HST.), so a $100,000 airplane will cost nearly 130,000, courtesy of the liberals.

All of that is fully avoidable if the airplane is registered in the US and remain registered there (which it does), with a US address, which can be changed on a later date. The luxury tax made many owners very desperate, so I saw many becomes creative to circumvent those absurd taxes.

As for the operate cost - I live in rural NorthWestern Ontario, where a single engine like a 172 is really pushed to get you anywhere, and during Winter, it's either sitting doing nothing or you flight a lot of night operations (sunset can be as early as 4:30 PM), and you can barley get two people this way. Not to mention, there is a big piece of water body called Lake Superior - and I'd feel a LOT more comfortable crossing it on a twin than a single. So even if it's for safety reasons, twin is the way to go. Now throw in to the mix the tons of forest and no place to land during a single engine operations.....

I understand Northwestern Ontario, I flown it in everything from a Cessna 150 to a Piper Cheyenne, most recently a DHC-2 Beaver. It is not a place I would want to have an emergency! Certainly an icing capable twin is is the way to go in that part of the world. We got into ice up there many times in the Aztec, and Cessna 340.

So the budget must meet the operational need! As I have said, I'm not familiar with the current rules about keeping a US registered airplane in Canada for an extended period, I just know what I have had to do when I was bringing one in...

Did you get an AME/A&P (if it was in the US) to look at the airplane before purchasing it?

As long as the aircraft is “N” registered to a U.S. entity, Transport Canada is ok with your class of aircraft (privately owned & not a pressurised turbine/a non Part 604) staying in Canada. CAR 202.42 applies. There are companies in the U.S. ,Delaware especially, that specialise in Offshore ownership of “American” aircraft.

However, be very careful to ensure that Canada Customs agree with your assessment of what constitutes “importation”. There were a couple of N registered aircraft a few doors down from me in Alberta. The owners tried a scheme that sounds like your plan, did not pay taxes and the planes were seized after a few months while they were being painted and upgraded. They never flew after initial arrival. I understand the fines were equal to and on top of the taxes levied, and because the money ran out the planes went back to the states on a truck.



Cessna 172s have gotten stupid high priced because all the flying schools have been chewing them up.

PilotDARs comments are very true.

The purchase price of a machine is often inversely proportional to the operating cost. Cheap to buy, expensive to run or Expensive to buy, less expensive to run. The annual costs (fuel/maintenance/overhaul reserve of engines & props/insurance/etc) of a turbocharged light twin is likely to run a private owner 4 times what a 172 would. The hit if a major piece breaks is in another league as well - I would plan on $70,000 CAD to overhaul one Seneca engine against $35,000 CAD for the 172. Your points on the safety are spot on, but it ain’t a small increase in cost.

On the other hand, if something happens to my 172 engine in the air - me and my family are gone in this area, along with the airplane itself. It's also an issue where the closest airport is 300 NM, that brings the turbocharged twin into even better light. Even our local CASARA (Civil Air Search and Rescue) used to run only twins, until theirs broke down, because it is that crucial.

So the way I see it - it's either a turbocharged twin or nothing, and only the Seneca has that in a reasonable/affordable price. Can you think of any other turbocharged twin?

As for the N registration - I am an FAA CMEL with IR, most of my hours are done in the US anyway, where the airplane will spend most of it's time anyway (mainly because after flying in both countries, I, sadly, find Canada to be a Third World country in aviation compared to the US, both the government approach, infrastructures and places to fly to), so it's not like I am importing it, as much as I park it here for convenient. It's actually much shorter for me to fly to the US and than anywhere in Canada, if I need to, than to fly Canada-wide only.

I feel that my knowledge of airplanes is being tested... okay... Turbo Aztec, Turbo Navajo, Turbo Seminole, Cessna 303, 320, 337, 340, and many 400's, Beech turbo Baron, so there are choices in this category I have not flown the Seminole, 320, 400's or Baron, so cannot speak about them first hand.

I guess that we see this differently, I've flown in 47 states, and 21 other countries, and found aviation in Canada to be an ideal balance of low on restrictions, very easy airspace, and adequate in infrastructure in each of the ten provinces, and three territories I have flown in. I have found the cost to fly in Canada to be comparatively low, considering some landing fees I have paid in Europe and Scandinavia. As for places to fly to, I cannot imagine more opportunity than one would find in Canada. Beaches of PEI to the mountains in BC, the fjords of Labrador to the thousands of welcoming lakes in Ontario, and I could always buy gas where i needed it. My personal record is flying to camp on the shore of a beautiful lake and waterfall, 93 miles away from the nearest other person or settlement of any kind. Ahhhh.....

Which is what is paid for by taxes and user fees which one might choose to pay. The US has ten times the population for less area, so yes, they have more financial basis for infrastructure.

Sure, I think that is the case for 90% of Canadians. I do have Canadian friends, who own N airplanes, keep them in the US, and drive to the airport in the US to fly them. As you express great satisfaction with US aviation, that's probably your best option, just know the rules about the occasional trip in which you might bring the plane to Canada.

I didn't intend to test your knowledge, nor was my message aimed at you (or anyone else for that matter). I did put a search on a few buy-and-sale website for an AFFORDABLE TWIN, I came up very short. They are either naturally aspirated or very expansive turbocharged, with the Seneca being maybe the only one that is affordable turbo (for example - Aztec, Seminole, and most of the low-end Cessna being the first, and the Navajo and the rest being turbo but extremely expansive), so that is why I ask my question - relatively affordable and turbocharged.

As for the US, I don't know when was the last time you went there, but in the last year I put over 200 hours there, and 100% of the airports I have flown to, most class G, have LPV approaches to basically ILS minimums (200 AGL), while in Canada it's extremely uncommon to find class E or Class G airspace with such approaches. That is on top of other infrastructures.
Many have compliantly vehicle you can borrow, just top up the gas, free snacks, beds, heated/cooled pilot lounges and more.

The fact they require ADS-B out and soon, 406 ELT will become mandatory (as a matter of fact - well over 80% of the US aircrafts already have them) means they are lightyears ahead of Canada. I am a volunteer SAR pilot, and I can tell you - if you crash in Northern Canada in Winter, your survival chance is less than 50%. Just finding you, with out old age equipment, might cost you your life. With the 406, your survival chances, assuming no major storm is present, are jumping to well over 80%. We will find you in a matter of 30 minutes or less, and more than likely ground teams will already be dispatched way before us, while with the old ELT, they won't bother show up until we can find you.
You would think being primarily inhabited, Canada will require such equipment.. The best compromise? I beg to differ.

The fact that Canada does not yet require this equipment, in no way prevents an aircraft owner from installing it. A few owners never leave southern Ontario, or other well populated areas, so they perhaps see a lesser cost/benefit to having such equipment.

"Affordable" is a very broad term. Two major factors apply: How much money do you have to spend in total, and how much money can you afford to spend to maintain and operate it. I'm not up to date on the costs to operate light twins, I have been out of them for a while. But I do believe that the cost per mile flown for a twin will be much greater than the cost for mile for a single. Sure, the twin offers much greater redundancy and safety for remote operations, and if your operational need justifies that added cost, certainly, do that! But, if "affordability" is on your mind before you purchase (very wise) don't be optimistic about the cost to operate. Do the math for all of the operating costs. The Continental TSIO-360's are good engines, until they need work, then they are comparatively very expensive. I'm not saying that they are not good engines, just not economical. I use to work on the Continental accessories, and the TSIO-360's seemed to be about the most expensive. I have had to do an approval for the fabrication of replacement primary structure parts, as Piper would not support the plane with factory replacement parts. And sure, Cessna is not perfect in this regard, and Beech are know to be very costly.

In my fifty years of GA aviation in Canada, I have seen a lot of airplane languish, because the owners simply lost interest in keeping paying the bills for them. The planes flew less, so inactivity costs went up, and pilot recency went down. And, I've seen "budget airplanes" within the owner's capacity, which flew lots (I owned a C-150 for 35 years, I never worried about the operating cost at all). And, I've seen a few well funded owners, who simply said: Do what it needs to be well maintained. It's not my business to know which approach you'd like to take, but remember my recommended rule of thumb: How much money do you have to buy and airplane with? Buy a well maintained one which costs half that much, and leave the rest in the bank until you need it. If you've done that, you bought an affordable airplane.

How do you know it's a well-maintained one? I assume you will need to have an AME inspect it for you?

Absolutely!

Here comes some free advice, 'been there, 'done that, many times!

You, yourself, research everything you can about the type you propose to buy. This includes combing the web for all the reports and comments about operating costs and problems (a tool we did not have decades pats!). This includes understanding the engines and props, as well as other systems. Recall my mentioning earlier that a client called me week before last with a damaged (okay, simply lifed out) hydraulic actuator on a light twin (not on our list), part months away, and probably about 5% to 10% of the cost of the whole plane to buy. The airplane will be grounded for months, waiting for a rather expensive part just to fly again. Not a great situation. Tiedown/hangarage, insurance, finance costs continue while the plane is grounded... Understand yourself the sources of consumable parts. Does the original manufacturer still sell part for it? Call them and ask! Understand a random cross section of costs for parts which could break/wear out. And, availability. I client once had a legacy Twin Otter which needed rudder cables. 50 weeks delay from [the old] deHavilland. Shall a Twin Otter stay grounded for a year awaiting rudder cables? Let alone wings, that's a whole other story - but you can forecast those...

Then, you, review all Airworthiness Directives, and service letters/bulletins which apply to the airframe, engines and props. Because, when you look at a particular airplane, you're going to check that all of the AD's have been complied with. Are any recurring? You're going to have to do them again if they are. Cost? Parts? The AME you're going to hire will do this again (and charge you), but you do it first, so you understand what he's going to tell you. One service bulletin to check on Senecas is Piper SB No. 956, landing gear trunnion wear. I've had to approve special repairs on two Senecas, on which this one was ignored, and there was too much wear.

Then, once you have your eye on a particular plane, before you spend money going to look at it, ask about AD compliance. You're going to confirm later, but may as well ask right out of the gate. No compliance, no import. Then, any accidents? Sure, ask the seller, but search databases as well. You can get the aircraft history from the FAA, an Oklahoma office. If the airplane has been damaged, was it repaired properly?

I had to design and approve a repair to a Seneca wing rib, which had been very poorly repaired after what I suspect was a hard landing. Access was poor, so also the repair. The airplane was not airworthy, found by the buyer after some time in service:

https://cimg2.ibsrv.net/gimg/pprune....e2aa7411e3.jpg

Note four missing rivets (one hilock head lying in the bottom skin to the lower right), and a horrendous attempt to repair, without replacing the cracked rib. This rib connects the wing structure around the landing gear and engine mounts, kind of important to be sound.

Determine if Piper SB No. 437A is applicable to the Seneca which interests you. Read it for yourself, it's kind of critical. A Seneca failed it, no Piper parts, we had to make replacement part$, and I had to approve the repair, very co$tly! Otherwise, it was grounded forever.

Similarly, are there any unapproved modifications to the airplane? Approving or redoing them properly can be expensive when found later. Do all the radios work? Is there 100 feet of unused wire from old avionics under the panel? (see C182RG remark later)...

Understand engine and prop overhaul costs. For the engines, understand turbo and starter adapter overhaul costs, they both tend to consume unforecast maintenance - the starter adapters in particular, I worked on them for years. Props life out, or fail inspection, can you still buy that model? I have to approve alternate props for planes for which the original props fail inspection and are no longer available.

Once you have done all of your homework, and are still content that the airplane is, and will remain within you budget, hire an AME you trust, and you pay for. Satify yourself that they have no affiliation with the seller at all. Pay the cost for that person to go to the plane, and do what will amount to a full annual inspection. This will include a complete review of the logs, and all damage/repairs/modifications. Once the AME reads what has been done, they will visually confirm it was done in accordance with the correct data. My guess, but I would be surprised if a single person AME familiar with Senecas could do this in less than four days. You're paying them one way or the other, and the other may be them telling you not to buy the plane! The other wrinkle to this may be that the seller does not want to make the plane available for the inspection - walk away. or, the AME gets is apart and finds something (see photo above). You're going to walk away, the the seller will be p...ed at you - their problem! That inspection probably cost you $5000+, whether you buy or not. The one good thing, is if the inspection passes, and you buy, you probably get a fresh annual inspection signed off! but, it' going to need something, all planes do!

I once did buy (actually twice, now that I think about it) airplanes with defects I had found. In each case, I knew that I could fix the defect, and the cost, and the seller compensated - okay... I once had to train a new buyer in his new (to him) Lake amphibian. After he bough it (no inspection) there was a $55,000 bill to make it airworthy. I test flew it out of that work. The seller did come good for a portion of that cost, but it was still a surprise for everyone. So, if the inspection turns up a defect, maybe you can deal. But, can you ferry it back? can you get the repair done? What if, once in there, you find something else?

Once you like it, you've got to go and get it, so add that to the purchase cost too. I've had airplanes I was ferrying home break - once at Broken Bow, Nebraska, Sunday morning (C182RG). Happily, I'm resourceful!These factors are why I remark to spend half your budget, these are what the other half is there to cover!

So, yeah, have an AME review the paperwork, after you have, and then, go to look at the plane. Maybe they fly back with you, in case it breaks in Broken Bow, Nebraska, Sunday morning!

I hope this makes you an informed buyer....

I looked at importing fairly seriously a couple of times over the last few years. The abridged version is:

1. There is a rule that mandates a maximum number of days an N- (or any other reg) a/c is allowed to stay in Canada per year. It's a cumulative total and taking a complete guess it's about 90 days - so flying it out of Canada into the US every 3 months will not fix this issue.
2. However, that rule seems to be fairly much ignored so long as you pay customs duties (including Ontario luxury tax) on import. In my experience, most Canadian airports - especially in the south have many N-reg aircraft sitting on ramps, in hangars etc. As stated above, if you don't pay the import duty/luxury tax then you're probably toast - note that this isn't Transport Canada collecting the money - it's the CRA - and they don't care where its registered, only where it is owned out of/lives.

I wouldn't consider that there is a big price disparity between the US and Canada markets. You will probably pay a premium in Canada because:
1. No import duty payable - so anything you buy south of the border needs that price added so a local seller to a Canadian buyer can charge that premium
2. Part 91 maintenance in Canada is far more thorough than in the USA. Many of the things that older US aircraft are allowed to pass 'on condition' are not accepted as such by TC. My experience was more in the turbine/higher performance areas where, for example, it's (almost) impossible to operate a turbine PT6 on the MORE program as TC won't generally accept it. Licensing standards for engineers are higher and so you might argue that a C reg aircraft has a higher standard of airworthness than an N-reg (that's a broad generalisation and I'm sure there are many examples where this can be demonstrated to be false).

If you're comfortable with US maintenance the keeping the plane on N-reg is good because you can avail yourself of all the opportunities to use US Part 91 maintenance regs to your advantage. You may also have a selling advantage later as you have the whole US market to sell to - which is easier with an N-reg rather than having to reimport it back to the US.

The final factor (and I'm a little hazy on this) - I don't think Canadian's can own N-reg aircraft themselves - (but I'm not Canadian so don't know for sure) - and may have to own it through a shell company in the USA. This would add a couple of $000's to your annual fixed costs. But like I said, this may not apply to Canadians.

So plusses and minuses each way. But you won't avoid the import and luxury tax - at least not for long.

Canadians, or any other non American citizen, cannot own a N registered aircraft. You have to set up a company that owns the plane and you own the company. There are lots of companies that do are set up to do that. I think is was pretty reasonable and did not cause any ongoing expenses. You could check with AOPA to find out more.

I knoiw several guys with jets/turboprops that are still on the us register. Basically you lease to a leasing company that leases it back to you. you will most likely have to pay GST on your new toy. AFAIK you can avoid the luxury tax as well

I owned an N registered airplane while training to fly in Canada. Had to set up an LLC company that actually owned the airplane. Set it up in Montana as there is zero sales tax and it cost me $5.00 to register the plane. When I flew it into Canada customs kicked me out until I paid the GST then I was good to keep the plane in Canada and do a Canadian license. Best part of having a N registered airplane was when it was time to sell it I had a much bigger market. Also didn’t need to deal with Transport Canadas mechanical issues to convert it to a C register.

I'd just like to add this, I'd think a Canadian aircraft buyer/business owner would actually KNOW this stuff....

The luxury tax applies to aircraft that meet the definition of subject aircraft under the Act and are priced or valued above the $100,000 price threshold, unless an exemption applies.

Under subsection 2(1), subject aircraft means an aircraft that is an aeroplane, glider or helicopter as defined under subsection 101.01(1) of the CAR with a date of manufacture after 2018 and which meets any of the following conditions:... Blah blah blah 40 seats or less, 12 cup holders or more and a stripper pole....

So a lil ol Seneca wouldn't be taxed under the Luxury tax, unless it was a 2019 MY. You could buy a 3.5M$ Citation built in 2017 and not be Lux taxed.

It's ok to lean right, I do, but don't lean so far right you can't read the information on the left side of the page.....

TR