Luxury Tax Explained

YOUR GUIDE TO THE CANADIAN LUXURY TAX

YOUR GUIDE TO THE CANADIAN LUXURY TAX

At Lexus of Kingston, we strive to provide our customers with an in-depth understanding of the automotive market. That includes everything from vehicle reviews and maintenance tips to more information on taxes and fees. On September 1st, 2022, Canada's proposed luxury goods tax went into effect, primarily targeting luxury vehicles and automobiles, private planes, and yachts. Here's what you need to know about this new policy and how it affects you as an owner of a luxury vehicle like a Lexus.

WHAT PRODUCTS WILL BE SUBJECT TO TAXATION?

The luxury tax will be imposed on importing or selling certain automobiles and aircraft priced at more than $100,000 and on other vessels, including boats, priced at more than $250,000. Under the Select Luxury Items Tax Act, personal automobiles, including sedans, sports cars, minivans, and SUVs, will be taxed. The vehicle must weigh no more than 3,856 kilograms and have fewer than ten seats. The Select Luxury Items Tax Act exempts motorcycles, all-terrain vehicles, snowmobiles, travel trailers, ambulances, patrol cars, fire engines, and military vehicles. However, no exemptions exist for electric vehicles. As for aircraft, the Act applies to planes, helicopters, and gliders with no more than 40 seats. Commercial planes are exempt. The federal government has classified sailboats, yachts, deck boats, waterskiing boats, and houseboats among vessels covered by the Act. The new luxury tax will not apply to floating residences, ferries, cruise ships, or fishing vessels.

HOW LEXUS VEHICLES ARE AFFECTED

If a new Lexus falls below the stated threshold price of $100,000, it will be exempt from the new Luxury Tax. This is exciting as it makes owning a luxury Lexus possible and more affordable than ever! Some luxury Lexus vehicles, such as the 2022 Lexus LC, 2022 Lexus LS, and the LC Convertible, may be subject to the Canadian luxury tax. Reach out to us for more details on our Lexus vehicles and their prices and for assistance on how to choose the best Lexus vehicle for you!

PURCHASING A LEXUS

At Lexus of Kingston, we have an expert Finance Centre with extensive knowledge. Our finance staff can help you with financing a vehicle or leasing a vehicle by helping you secure auto loans and curate payment plans. We can also help you determine the fees and taxes you may be subject to upon purchasing a Lexus vehicle from our dealership. Rely on us to make tax calculations for you, including the new Luxury Tax, present you with different options, and help you find the most affordable vehicle purchase.