On March 11, 2022, the federal government released draft legislative proposals regarding the Select Luxury Items Tax Act, as highlighted in Ryan Tax Alert | Federal Budget 2021. The luxury tax was initially slated to take effect on January 1, 2022, but is now expected to commence on September 1, 2022.
The luxury tax will apply to most new cars and recreational boats, as well as certain aircraft (i.e., those intended for personal use), with a before-tax selling price in excess of $100,000 for vehicles and aircraft and $250,000 for boats. The luxury tax will have its own tax regime, including specific rules for registration, administration, and enforcement, and generally be calculated as the lesser of 10% of the total price and 20% of the total price in excess of $100,000 for vehicles and aircraft and $250,000 for boats.
The draft legislation contains relief provisions for:
Comments on the draft legislative proposals may be submitted to the Department of Finance by April 11, 2022.
Further details on the legislative proposals are available at: Government releases draft legislative proposals to implement Luxury Tax.