There are only a few people on earth who have the guts to dispose some gobs of million dollars for a private jet. However, 2019 became record-breaking for the industry as demand for private jets swiftly blasted off, prompting tremendous sales that year. The reason behind this unanticipated increase in revenue for this market is still unclear, but some of the suspected factors include the preceding year’s sturdier national economy and a huge tax break.
Jumping into a private jet for diverse purposes like leisure, business meeting, or alternative way to commute has been frequently considered by well-off individuals who have the capability to pay thousands of dollars every hour. This is because of the ultimate convenience it can provide in terms of security, safety, ease, and comfort. Going on a trip over a private jet plane would not certainly hold you up in the midst of unwanted troubles. There is no reason to fall in a very long line and wait for more than an hour before you finally obtain a plane ticket with no assurance of a comfortable seat. Security procedures in the airport would not also kill much of your time as you can head straight to the tarmac where your private aircraft is patiently waiting for you. A very wonderful fantasy to rhapsodize, isn’t it? But definitely, not everyone can afford this travel fantasy as hopping on a private jet for a round trip would extremely cost a lot.
For the reason that freewheeling privately in the air is much faster, easier, and more cozy to reach a destination, private jet charter industries had entered the aviation market and energetically competed with the commercial airline industry last year. According to reports published, takings of bizjets had lunged to at least 15 percent before the 2019 third quarter ended. The owners of private aviation also confirmed these recent findings with regard to the surprising increase in their revenue for both new and second-hand aircraft. They reckoned that the possible grounds for this phenomenon are the stable national economy and the tax break in the revised tax law. The tax law was revised in 2017, allocating a doubled deduction amount in the total tax that an individual is due to pay. With this, businessmen were able to save an ample amount of money to the extent that they can finally sit on a private jet when travelling around.
But amidst the jump of private jet sales last year, experts strictly warned everyone who has plans of acquiring their own unit that it’s indeed a great financial challenge. Purchasing a private jet plane demands millions from the buyer, and it’s not a one-time payment. After the unit has been purchased and paid the amount, succeeding million cash-outs will certainly rush in every year as maintenance of this aircraft costs the same as the purchase price. Are you ready for it?
2019: Banner Year For Sales of Private Jet Planes
Dan Drohan of Solairus Aviation said that due to the stabilized economy, most of their clients were able to take advantage of the overstock that resulted from the aircraft overproduction. Excess inventory had also grown so much last year because many aviation companies had generated new flying units for private charter even without a tangible request from confirmed buyers. Drohan also added that a flock of interested individuals made hay of this year-end acquisition opportunity for whitetails while the sun still shines and the favorable changes in the national tax are in effect. In the last 5 days of 2019, Solairus Aviation had recorded numerous orders of their whitetails.
Another reason for the sudden changes in the buying behavior of their clients is the 2017 tax break. This tax revision covers chiefly business expenditures. Thus, if you’re going to obtain a private jet plane for business purposes, you will be acknowledged to receive a certain amount of deduction from the due purchase price. This tax break also recognizes the personal use of the jet but is limited only to transportation to attend a conference, meeting, or any special or urgent matter around the country. Leisure, however, is not covered.
How Much A Private Jet Plane Will Cost, All-in-all?
Before you hand out your check to buy a unit for yourself, it is important to have an intensive calculation of the distance, hours, and operational costs beforehand to be able to arrive at a very sound decision in the end.
Jet Edge’s Chief Executive Bill Papariella explained that under the influence of the 2017 tax break, a $5 million jet can be sold for $2.5 million, half of the original price as the US president lets you take your first-year bonus depreciation. With this, charter units were able to compete well in the tight global market of aviation industries.
After the acquisition, the new owner of the jet plane is mandated to settle the income tax, but fortunately, on the arranged sale price. However, the possessor must utilize the jet plane for corporate purposes, including business meeting, conference, ocular visit, etc. If found out that the plane was not used for business even at least 50 percent of the time, the tax officials will take the price deduction privilege away. In this sense, well-organized records are very crucial in maintaining the effectiveness of tax break on your purchase, explained by Jerald August, chief of the international tax.
Other Way to Acquire A Private Jet
If the deducted price is still not enough to afford a private jet, fractional ownership may still allow the aspirants to obtain their favorite color. This type of ownership allows the buyer to acquire a certain share in the asset with privileges that include permitted usage, income quota, and priority ingress.
Aviation companies such as Flexjet and NetJets offer this type of private acquisition method wherein a buyer is awarded either halves or quarter portion of the total private jet plane ownership. Commonly, the jet price starts from $1 million and may vary depending on certain circumstances.
Before you take a step forward to owning your own private jet, ensure first that you have the ability to manage the financial challenges and maintenance responsibility of having one. Just a fair warning, this will never be easy.
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