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Ottawa releases draft proposals to implement Luxury Tax

March 16, 2022  By Wings Staff

In last year’s Federal budget, the government of Canada followed through with a proposal to introduce a tax on the sale of new luxury cars and aircraft with a retail sale price over $100,000, and new boats over $250,000.

The tax would be calculated at the lesser of 20 per cent of the value above these price thresholds or 10 per cent of the full value of the luxury vehicle, aircraft or vessel. Subject to Parliamentary approval, this tax would come into effect on September 1, 2022.

Inside Canada’s proposed Luxury Tax

As part of its process to implement the tax, Ottawa on March 11 released for public comment draft legislative proposals. The draft legislative proposals reflect, and respond to, input received during consultations with stakeholders.


The government explains these draft legislative proposals build on, and replace, the backgrounder that was released on August 10, 2021, as part of the consultation on the proposed Luxury Tax.

Two notable new provisions contained in these draft legislative proposals are as follows: Relief is proposed to be provided to after-sale improvements that are made to vehicles, aircraft or vessels purchased below the relevant price threshold; and relief for aircraft is proposed to be expanded to take into account qualifying flights that are conducted in the course of a business with a reasonable expectation of profit.

Canadians are invited to share comments on these draft legislative proposals by April 11, 2022, by emailing


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