News Update

Canada Will Introduce New Tax For Luxury Cars And Aircraft

Canada is set to impose a new ‘luxury tax’ on the sale and importation of high-value cars, planes, and boats, which will come into effect on September 1st, 2022. The levy is the realization of budget proposals first made last summer, which have now received parliamentary approval. The Select Luxury Items Tax Act is billed as part of the Government of Canada’s commitment to a fairer tax system introduced.


The new luxury levy targets specific aircraft and vehicles priced above CA$100,000 (€76,400) and certain yachts priced above CA$250,000 (€191,000). It will be calculated at 10 percent of the total retail value of the aircraft, vehicle, or vessel, or 20 percent of the value above the threshold.

The tax will only apply to new vehicles purchased by consumers for personal use. It will apply retrospectively to most sales made after January 1st, 2022.


“The economic impact of the luxury tax will be significant and [has] not been studied with a comprehensive understanding of our industry,” argues the President and CEO of the Canadian Business Aviation Association, Anthony Norejko. The tax is part of Canada’s Budget 2022, which aims to promote several green initiatives. These include making supporting clean electricity projects and zero-emission vehicles more affordable, and providing investment tax credits for net-zero technologies, battery storage solutions, and clean hydrogen.