Luxury Item Tax Act.....Ridiculous

[ryanhao99]

Registration Under the Select Luxury Items Tax Act - Canada.ca

www.canada.ca

Here is a link for the CRA announcement. I think I will not buy my C8 if this is actually affecting C8 sales.(which 99.99% will) I will not pay the greedy policymakers an extra 10% (More than 11k) on top of BC's crazy 16%+2.6% taxes on the C8.

Any thoughts? Is there a chance that this will be removed in the future? LOL

 

[ryanhao99]

It goes live September 1st and will be effective for all purchases since the Calendar year 2022.... CRA wants their money like we are not already paying enough. Time to move to AB or even the states.

 

[Shiraz]

I don’t think it will make a big difference. From a BDO article, the tax is calculated as follows on pre GST/HST price.

• 20% of the retail sale price above the relevant price threshold ($100,000 for vehicles and aircraft; $250,000 for vessels); or
• 10% of the retail sale price of the subject vehicle, aircraft, or vessel.

Let’s say the MSRP is $105000, the incremental tax would be $1000. I might be wrong but thats what it looks like. Clearly more expensive cars will get a bigger hit.

Source: Q&A: Canada’s new luxury goods tax

 

[HappyCamper]

I was thinking the same way Ryan was thinking initially until I read the fine print.

Don't get me wrong, I personally hate money grab taxes, but we do need to keep Justin happy.

This also tax applies to options ADDED to the car for up to a year after purchase. I am not sure how they plan to enforce or audit that? I suppose this is skirt someone buying the car from a dealer at $99999.00 and adding $75000 in optional parts to the car after purchase.

 

[Rhue]

I don’t think it will make a big difference. From a BDO article, the tax is calculated as follows on pre GST/HST price.

• 20% of the retail sale price above the relevant price threshold ($100,000 for vehicles and aircraft; $250,000 for vessels); or
• 10% of the retail sale price of the subject vehicle, aircraft, or vessel.

Let’s say the MSRP is $105000, the incremental tax would be $1000. I might be wrong but thats what it looks like. Clearly more expensive cars will get a bigger hit.

Source: Q&A: Canada’s new luxury goods tax

You are correct.

 

[Gilles27]

I don’t think it will make a big difference. From a BDO article, the tax is calculated as follows on pre GST/HST price.

• 20% of the retail sale price above the relevant price threshold ($100,000 for vehicles and aircraft; $250,000 for vessels); or
• 10% of the retail sale price of the subject vehicle, aircraft, or vessel.

Let’s say the MSRP is $105000, the incremental tax would be $1000. I might be wrong but thats what it looks like. Clearly more expensive cars will get a bigger hit.

Source: Q&A: Canada’s new luxury goods tax

You are correct.

Going to cost me an extra 10k on a 150k Z06, then they tax the tax

 

[ryanhao99]

I don’t think it will make a big difference. From a BDO article, the tax is calculated as follows on pre GST/HST price.

• 20% of the retail sale price above the relevant price threshold ($100,000 for vehicles and aircraft; $250,000 for vessels); or
• 10% of the retail sale price of the subject vehicle, aircraft, or vessel.

Let’s say the MSRP is $105000, the incremental tax would be $1000. I might be wrong but thats what it looks like. Clearly more expensive cars will get a bigger hit.

Source: Q&A: Canada’s new luxury goods tax

If this is the case, at least it hurts the wallet less...... My build currently sitting around 115k, so it's going to cost me 3k more. Taxes here is just insane.

 

[ryanhao99]

Going to cost me an extra 10k on a 150k Z06, then they tax the tax

Must be so hard for Z06 buyers. And if I'm not mistaken, you are not getting a lot of options with 150k on Z06 right? I watched a video the other day and with all those carbon options/Z07 package, a decently loaded Z06 was sitting at 160k US.

 

[ryanhao99]

I was thinking the same way Ryan was thinking initially until I read the fine print.

Don't get me wrong, I personally hate money grab taxes, but we do need to keep Justin happy.

This also tax applies to options ADDED to the car for up to a year after purchase. I am not sure how they plan to enforce or audit that? I suppose this is skirt someone buying the car from a dealer at $99999.00 and adding $75000 in optional parts to the car after purchase.

I believe this only applies to new vehicle sales as well. So technically if the dealership can sell the car as used to you, you may be getting away with it? And of course that below 100 k MSRP would be something car buyers consider a lot in the future.

 

[kerry4]

Yikes. The last three cars I have bought were all over a hundred grand. I don't mind paying for the car but I hate giving the government a dime of my money if I can help it. My accountant helps me with keeping what I can from the crooks. LOL.

 

[ryanhao99]

Yikes. The last three cars I have bought were all over a hundred grand. I don't mind paying for the car but I hate giving the government a dime of my money if I can help it. My accountant helps me with keeping what I can from the crooks. LOL.

They rip you off on your income, then tax up everything you buy LOL. Welcome to Canada I guess?

BTW my build is looking 90% alike your profile pic. Orange 2LT Convertible, Z51, carbon flash painted mirror/spoiler/wheels/nacelles.... I'm going with a natural GT2 seats.
Very glad to see a built car with a similar spec!

 

[harshadt]

The luxury tax applies to vehicles not previously registered in Canada, not only new vehicles. So if the dealer has a car that he’s selling as used due to it being a demo but previously unregistered, you will have to pay the luxury tax. As well as for any imports of vehicles built after a certain year, I think it’s 2019 or something like that.

 

[HappyCamper]

Manufactured after 2018 with a selling price greater than $100000 whether new or used is how I am reading this.

• Vehicles - Passenger vehicles, with a date of manufacture after 2018, typically suitable for personal use including coupes, sedans, station wagons, sports cars, passenger vans, and minivans with seating capacity of not more than 10 passengers, SUVs, and passenger pick-up trucks will be subject vehicles for purposes of the new tax. Motorcycles and certain off-road vehicles, such as all-terrain vehicles and snowmobiles, racing cars (i.e., vehicles that are not street legal and are owned solely for on-track or off-road racing), and certain motor homes are not subject vehicles and are not in the scope of Luxury Tax. Similarly, ambulances, hearses, vehicles clearly marked for policing activities or marked and equipped for emergency medical, and fire response will also fall outside the scope of the tax.

 

[harshadt]

“A motor vehicle that has already been registered with a government before September 2022 is excluded from this definition, provided that possession was also transferred to the user of the vehicle before this date.”

 

[Northerngoat]

Manufactured after 2018 with a selling price greater than $100000 whether new or used is how I am reading this.

• Vehicles - Passenger vehicles, with a date of manufacture after 2018, typically suitable for personal use including coupes, sedans, station wagons, sports cars, passenger vans, and minivans with seating capacity of not more than 10 passengers, SUVs, and passenger pick-up trucks will be subject vehicles for purposes of the new tax. Motorcycles and certain off-road vehicles, such as all-terrain vehicles and snowmobiles, racing cars (i.e., vehicles that are not street legal and are owned solely for on-track or off-road racing), and certain motor homes are not subject vehicles and are not in the scope of Luxury Tax. Similarly, ambulances, hearses, vehicles clearly marked for policing activities or marked and equipped for emergency medical, and fire response will also fall outside the scope of the tax.

Correct, used cars manufactured post 2018 will have the luxury tax applied.

 

[harshadt]

Correct, used cars manufactured post 2018 will have the luxury tax applied.

Only if it hasn’t been registered in a province in Canada yet.

 

[DenisC8]

We don’t control the rules of the game, we just play it.

the luxury tax is happening, and there is nothing that can be done about it. So there is no point complaining. Some will be celebrating that the wait times for C8s and C8 Z06s will decrease.

 

[tyho]

If I'm looking at buying a $200,000 Porsche, I'll be paying 20% on the $100,000, plus HST on the entire price and on the LT as well. That's more than $20,000 in additional taxes. Add the fuel, tire, excise tax and dealer fees, second thoughts on buying the car. I can see this may cost jobs.

 

[DenisC8]

If I'm looking at buying a $200,000 Porsche, I'll be paying 20% on the $100,000, plus HST on the entire price and on the LT as well. That's more than $20,000 in additional taxes. Add the fuel, tire, excise tax and dealer fees, second thoughts on buying the car. I can see this may cost jobs.

Yes but you are not buying a $200,000 Porsche , so hypothetical lose of sales don’t count in real life

 

[Murray20c8]

Taxes pay for public services. The rich hate being taxed as much as the poor, but it's a necessary evil.
Some things seem silly, but there must be reasons behind their madness. I don't understand why a 100k car is worth taxing more than a 250K boat. quantity? Anyway, let's keep politics out of it. Sure bitch about the tax. I'm with you, but let's leave it there.