GuardsRed992

Canadians will now face a 20% tax on vehicles over $100K at a max of 10% of the total price of the vehicle.

The tax comes into effect on September 1st. My car is expected to be delivered in August, but if the date slips to Sept, will I have to pay the tax? Or because the deal was already initially signed in 2021 am I in the clear?

I hope it comes in the next few weeks...which is likely since the ship arrived in Halifax yesterday. This will help me stop worrying. I really dont want to pay $15000 more for the exact same car.

https://www.canada.ca/en/services/ta...istration.html

CanAutM3

Just to clarify, the luxury tax is of 20% of the value above 100k up to 200k, and then of 10% on the total value over 200k. Think of it as a progressive tax rate that kicks in at 100k and progressively increases to 10% up to 200k.

The tax applies at the moment the title transfer occurs, which is usually when the car is registered/plated in the province. What is even worse is that PST and GST are applied over the luxury tax, so here in Quebec where we have ~15% GST+PST, it is really a 11.5% tax (for a car above 200k).

I an really pissed about this tax. It is reputed that it will bring in 120M CAD per year, that’s ~$3 per citizen. What difference will it really make.

icanthelpit

Government cradle to grave care costs $. Not a political statement, it is a fact.

GuardsRed992

Interesting.....on the plus side, values of used 911s will hold up here as customers would want to avoid that tax.

Hopefully it doesn't take more that a couple weeks to truck the car from Halifax to Toronto. lol

gthal

I completely agree... I won't make any political commentary as it would be laced with inappropriate language and entirely offside with the forum rules

GTS524

hey here in the U.S. our gov. just prints what they need! Oh damn here we go getting political again.....

CanAutM3

Agreed. I also expect that a portion of the tax will be passed onto the used market. Something that lessens the blow for those that were able to buy in the 1-2 years before the tax kicks in.

shrimp money

Not political, just facts. Ya'll Canadians need to get yourself a JPow!

kayjh

I don't like the tax and with the limited amount of money it will bring in, it is clear the liberal government did it to score political points. Having said that, I like the country so I'll try not to grumble too much about it. Some US states have annual car wealth taxes that keep on taking year after year. Not sure hoe the total amount paid compares to the new Canadian luxury tax. I believe some provinces in Canada (BC) already have a luxury tax, so this will really be piling it on in that province.

CanAutM3

While I fully agree with the stated “fact”, at $3 return per citizen, that luxury tax on new cars isn’t meaningful to support the cited “fact”. It’s a political move, nothing more.

bobblehead

anyone knows how the leasing work with this LT ? I guess any trade in is also being ignored when calculating LT.

GuardsRed992

I think Leases are exempt

Will the Luxury Tax apply to leases?

A lease of a subject item is not considered to be a sale under the Luxury Tax regime. Lessors that carry on a business of leasing, but not selling, are not required to register and the Luxury Tax would, instead, apply when the lessor purchases a subject item. The cash flow effect of this tax should be considered when determining upfront charges and periodic lease payments charged by the lessor to the lessee. Registered vendors that lease subject items would be required to self-assess the tax when moving the subject item from inventory to lease. This reporting requirement will need to be closely tracked by registered dealerships that also lease subject items.

bobblehead

if exempted, then everyone is going to do the leasing route. I would do the same, like lease then buy it out (to avoid LT)

My understanding is the importer is to pay the LT at port of entry, so how is the importer going to pass this LT back to the final end user of the product, being the consumers. Pretty confusing to me.

icanthelpit

Do you mean the fact I wrote or the tax action itself being political? Thanks.

bobblehead

https://mcmillan.ca/insights/what-th...cing-entities/

some info on leasing ...