New Luxury Tax on Trucks, Boats and Aircraft

With the price of vehicles increasing, especially trucks, the luxury tax is more apt to apply to the purchase of your new vehicle.

The Luxury Tax will apply to certain vehicles and aircraft exceeding $100,000 and boats exceeding $250,000, before GST/HST, purchased on or after September 1, 2022. The Luxury Tax will be determined as the lesser of:

• 10% of the total price; and

• 20% of the total price exceeding the price threshold.

All improvements, additions, taxes, duties, charges, fees, and amounts paid in respect of the delivery or importation will be included in the total price. The resulting Luxury Tax is then added to the cost of the item for the purposes of calculating the GST. This results in GST being calculated on the Luxury Tax.
The definition of vehicles for purposes of the luxury tax is passenger motor vehicles manufactured after 2018 that are equipped to accommodate 10 or fewer passengers and have a gross vehicle weight rating of 3,856 kilograms or less. Exceptions apply for certain types of vehicles (e.g., hearses, certain recreational vehicles) as well as vehicles equipped for police, military, or other emergency services activities.