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Apr 10th, 2024
Taxation law
Aircrafts, cars and boats: the looming luxury tax
Apr 13th, 2022
By Martin Bédard
On March 11, 2022, the Federal government confirmed its intention of implementing a new luxury tax on purchases and leases of aircrafts and cars of $100,000 or more and boats of $250,000 or more. The tax will be the lesser of:
- 10% of the value of the luxury item;
- 20% of the value of the luxury item over the threshold ($100,000 or $250,000).
The tax is meant to be paid by registered dealers at the time of sale, in addition to GST, QST, and other provincial sales taxes charged on the purchaser. Some exemptions can apply in specific circumstances. The tax would come into force as of September 1, 2022.
Industry stakeholders and purchasers of such luxury products should do well to review the application of this new tax with their advisors.
