CANADA: NEW LUXURY TAX ON BOATS￼ GOES INTO EFFECT SEPT. 1, 2022
The federal government plans to implement the new luxury tax on boats on September 1, 2022.
Therefore, all boats (2019 and newer) that will be sold on or after September 1, 2022 will be taxable, even if the purchase contract was signed well before this date.
However, it appears that contracts signed before December 31, 2021 are exempt.
According to the information available, this new tax will be applicable on both new and used boats (for 2019 and newer) over $250,000 CAD.
You can choose between 10% of the contract value or 20% of the excess of $250,000, whichever is less.
GST and QST apply to this new tax. So, it is a tax on top of existing taxes.
We are waiting for more details on how this will be applied, it is always the finer details that are important.
For example, a sale between individuals residing in Quebec who are currently exempt from tax (GST & QST), for example if the sale is for a 2020, will the seller be required to charge this luxury tax and return it to the government or will it be charged upon registration?
At this time, there are many questions that remain unanswered.
The brokers at Ita Yachts Canada are on keeping on top of this news.
In short: a transaction completed before September 1, 2022 is therefore very advantageous for boats of 2019 and newer that exceed $250,000 CAD.
Here is a link to the Government of Canada website about this new tax.
Ita Yachts Canada offers the information regarding this new tax in good faith but is not able to guarantee the accuracy of the information regarding all details of this new tax. It is the buyer’s responsibility to instruct their agents or attorneys to verify and validate the information of their choice.