Luxury Tax UpdateLast year we posted a guide to the proposed luxury tax that was introduced by the federal Liberal government in the 2021 budget. The original date of implementation was set to be January 1, 2022.
As you may have noticed, January 1 has come and gone and the new tax is still not in effect. However, the luxury tax proposal is still alive and well. No reason has been provided for the delay, but it is not uncommon for legislation to take longer than expected to pass, particularly when it is met with as much resistance as the luxury tax has seen.
On March 11, the government released the draft legislative proposals for public comment. The legislation appears to be substantially the same as the original proposal: the tax would apply to new luxury cars and aircraft with a retail sale price above $100,000 and new boats above $250,000, and would be calculated at the lesser of either 20% of the value above the price threshold or 10% of the total value of the item.
Currently the legislation has been closed to public comment and is now being reviewed by Parliament. If it is approved by Parliament, the new tax will come into effect on September 1, 2022. For now, interested parties will have to wait and see if the legislation will be delayed again, killed by Parliament, or if this September will finally see the implementation of the federal luxury tax.
By Robin Smith, M.A., CCS
– Robin is a trade industry professional based in Victoria, BC.
Last year we posted a guide to the proposed luxury tax that was introduced by the federal Liberal government in the 2021 budget. The original date of implementation was set to be January 1, 2022.
As you may have noticed, January 1 has come and gone and the new tax is still not in effect. However, the luxury tax proposal is still alive and well. No reason has been provided for the delay, but it is not uncommon for legislation to take longer than expected to pass, particularly when it is met with as much resistance as the luxury tax has seen.
On March 11, the government released the draft legislative proposals for public comment. The legislation appears to be substantially the same as the original proposal: the tax would apply to new luxury cars and aircraft with a retail sale price above $100,000 and new boats above $250,000, and would be calculated at the lesser of either 20% of the value above the price threshold or 10% of the total value of the item.
Currently the legislation has been closed to public comment and is now being reviewed by Parliament. If it is approved by Parliament, the new tax will come into effect on September 1, 2022. For now, interested parties will have to wait and see if the legislation will be delayed again, killed by Parliament, or if this September will finally see the implementation of the federal luxury tax.
By Robin Smith, M.A., CCS
– Robin is a trade industry professional based in Victoria, BC.
