Newswire

Aircraft, Vessels and Vehicles: The New Luxury Tax

WA-Featured-Image

Download this article as a PDF.

First announced in the 2021 Federal Budget, the new luxury tax will apply to sales, leases, and imports in Canada of certain luxury recreational aircraft, vessels, and vehicles delivered on or after September 1, 2022.

What is subject to the tax?

The sale, lease or import of new vehicles, private aircraft, and leisure vessels with a sale price* or value exceeding the price threshold of:

$100,000
for vehicles and aircrafts

$250,000
for boats and yachts

*The price includes taxes, duties, levies and fees, except GST/HST.

Modifications of ≥$5,000 within 1 year of sale can also attract the tax.

Who pays the tax?

The Vendor. Where the vendor is a federal, provincial, or Indigenous government, the purchaser pays.

Vendors making qualifying sales, leases and imports must register, file quarterly returns, and remit the tax.

Sales between registered vendors are generally exempt.

The luxury tax cost will be passed on to consumers – expect to pay GST/HST on that cost.

How much is the tax?
The lesser of:

10% of sale price or value; and

20% of the excess over the price threshold

When is the tax paid?

Upon Delivery. The tax becomes payable at the earlier of:

  • The time of possession or right to use
  • The transfer of ownership

Additional tax may be payable on completion of modifications to the luxury item within 1 year of sale.

Exemptions to the tax

  • Written agreements entered into before 2022
  • Vehicles, aircraft, boats manufactured before 2019
  • Vehicles with seating capacity of >10 individuals
  • RVs that provide temporary accommodation
  • Emergency vehicles
  • Vehicles with <4 wheels
  • Cargo and military aircraft
  • Floating homes
  • Commercial fishing boats
  • Luxury items previously registered with a province or the Government of Canada

Recent Posts

The information contained herein has been provided for information purposes only. The information has been drawn from sources believed to be reliable. Graphs, charts and other numbers are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Market conditions may change which may impact the information contained in this document.  Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions.  Before acting on any of the above, please contact your financial advisor.

© 2024, Wellington-Altus Private Wealth Inc. ALL RIGHTS RESERVED. NO USE OR REPRODUCTION WITHOUT PERMISSION.

www.wellington-altus.ca