Government of Canada: Luxury Tax Consultation

[bcrdukes]

Lots of ballers on Revscene so here's your chance to speak up about the proposed Luxury Tax that may come in to play January 1, 2022.

https://www.canada.ca/en/department-...uxury-tax.html

Originally Posted by Government of Canada

Join in: Open until September 30

The impact of the COVID recession has been very uneven. Some Canadians have lost their jobs or small businesses, while some sectors of the economy have flourished. That's why it is fair today to ask those Canadians who can afford to buy luxury goods to contribute a little bit more. To that end, the recent budget followed through on the government's commitment to introduce a tax on select luxury goods.

The budget proposal would 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 thresholds ($100,000 for cars and aircraft, $250,000 for boats) or 10 per cent of the full value of the luxury car, boat or aircraft. The tax is proposed to come into force on January 1, 2022.

Our objective
Through this consultation process, the Department of Finance is seeking feedback on the design of the proposed Luxury Tax.

Key questions for consideration
Full details on the government's proposed approach can be found in the technical background paper. Specifically, the government is seeking views on several key design features, including:

the detailed tax base;
the application framework; and
the registration rules.

[ilovebacon]

so far so good for this decade isnt it...

[danned]

this time is luxury, what is next?
i wonder if we could have coronavirus tax

[ssjGoku69]

Looks like you'll still get hit with this tax even if you're leasing a $100k+ car.
https://www.bdo.ca/en-ca/insights/ta...ury-goods-tax/



It could be worse. I believe it would be within our lifetime that the tax exemption on the sale of our principal residence will be abolished. I'm betting it will be when the Boomers dwindle in numbers so they can still claim the PR exemption. Probably a system similar to the USA will be implemented where a certain amount of capital gain will be tax-free (e.g. $500k for a married couple), but anything above that will get taxed.

sooo.. it could be worse

[bcrdukes]

Originally Posted by danned

this time is luxury, what is next?
i wonder if we could have coronavirus tax

If you've dined out recently, you may or may not have noticed a "fee" for COVID-19.

[underscore]

Why is the limit for boats so high? Is there a 249k boat that isn't a luxury?

[hud 91gt]

Because owning a boat you are taxed every day you own it? Lol. They are money pits.

That is funny though. Coming from a boat owner (a very basic one at that), any boat is a luxury unless used for business. It seems a little more logical to own a more expensive car which you may use everyday, vs a few times a year 1/4 million boat. Maybe they figure bats depreciate fast enough on their own. Lol.

[CivicBlues]

Originally Posted by bcrdukes

If you've dined out recently, you may or may not have noticed a "fee" for COVID-19.

Nah, restaurants in Vancouver have smartened up and gotten rid of such a thing because it pissed so many people off. They just raised prices across the board instead

[GLOW]

Originally Posted by CivicBlues

Nah, restaurants in Vancouver have smartened up and gotten rid of such a thing because it pissed so many people off. They just raised prices across the board instead

yeh i've noticed this as well. still all the same, tough times due to covid we all know.

[PeanutButter]

Originally Posted by hud 91gt

Because owning a boat you are taxed every day you own it? Lol. They are money pits.

That is funny though. Coming from a boat owner (a very basic one at that), any boat is a luxury unless used for business. It seems a little more logical to own a more expensive car which you may use everyday, vs a few times a year 1/4 million boat. Maybe they figure bats depreciate fast enough on their own. Lol.

My dad's been through two boats and they are such a waste of money.

He has been out on the water once this year and that was only because his friends came in town and their kids wanted to go. I suspect he will not be on the boat for the rest of the year.

I told him he should just rent a boat when he needs it. It's much more economical.

[yray]

brb leasing a car that is 99995.00

[SkinnyPupp]

I can't think of any arguments against this.. People can shelter their money from income tax in many ways, so this is a way to get some of it when they try to spend it on superfluous stuff.

[Qmx323]

sale of new luxury cars and aircraft with a retail sale price over $100,000, and new boats over $250,000

So time to get into the "slightly" used luxury market?

Used 2022 models with 900 kms?

[TouringTeg]

I missed that part about it being new. This means a used $121k car won't be subject to this new Federal luxury tax.

"new cars and new aircraft priced over $100,000, and new boats priced over $250,000 (the price thresholds, respectively)"

https://www.canada.ca/en/department-...goods-tax.html

[68style]

Price AND demand for those “used” GT cars at Porsche Vancouver just went up againnnn

[sdubfid]

Welcome to Canada: where ambition is discouraged.

[SkinnyPupp]

In 2021, ostentatiousness should absolutely be discouraged with every amount of effort society can possibly put forward.

[Hehe]

Our government is getting it all wrong.

Taxing luxury items just drive people who have the means to buy them elsewhere or not buying at all.

We are trying to come out of an economic impact caused by the pandemic. If anything, we should be encouraging spending to revive the economy.

The economy in Canada is going heavily into real estate. But people are buying real estate out of necessity or using it as a saving account. They are *storing* their purchase power for the future. When you have so much purchase power save into the future... what happens? Huge inflation, housing crisis and shitty economy.

And really... a nicer pickup truck is in the high 5-figures now. A minivan is crossing 60k when all options are added. The 100k limit is rather low and only limit growth in areas such as EV (batteries are expensive, ICE cars come "dry" without much fuel in it). Again... curving the demand. Unless that figure is going to be adjusted every year, I don't see it being very reasonable.

What they should be taxing are people who are speculating/hoarding, be it RE, cryptos... etc. They are generating little to no economic activities. And worse, in the crypto sector, they are using valuable resources for something that has no other purpose other than speculation and value storage.

[Traum]

OK, I hope I don't sound like an entitled brat, but am I the only one who thinks a starting limit of $100k for cars on this luxury tax is set too low?

For what it is worth, $100k is pretty much the starting price of a zero-option Porsche Cayman GTS 4.0. Yes, that is a very, very nice car, but I'd hardly call that a super baller machine. In the $100k - $150k range, I'd imagine that it should be something that a smart and hardworking individual would be able to afford after saving up for it for a few years.

I am not smart nor hardworking enough to reach that $100k mark, so it is something beyond my reach. But I'd hate to see the federal government dashing the dreams of another enthusiast who is trying to use his smarts and working his butt off to chase that dream of his...

[Hehe]

Exactly. at 100k, it's not really a lot today for cars. 10-15yrs ago, 100k is M5 territory. Today it barely gets you a M3.

A freaking CR-V is close to 50 when some options that I consider "basic"... let alone luxury are added. And god knows how much that would be in 10yr time.

[westopher]

Theres a civic at a local dealer for $99,999 if you want to get under that tax threshold.

[twitchyzero]

living in vancouver where houses are 3M and exotics seen almost daily distorts your reality

100k for what's usually a depreciating asset is a lot of money

believe it or not new porsche and bmw are luxury products

fully-loaded trucks hauling toys, their owners already understand pay to play

[Hehe]

Nah... you can say whatever about that.

But the fact is, 100k car is no longer what 100k car is perceived as.

A Pagani Zonda was 325k USD in 1999 when it was first introduced and that was the ballpark for a supercar like a V12 Ferrari/Lambos. Today, any V12 F/L are north of 500k with some common options and a Pagani are in multi million dollar range.

And since when enjoying a slight luxury should be a bad thing? Because luxury is excessive?! Buying a 600k Lambo that you drive a few days a year is excessive. Buying a 100k F150 (which the F150 Lightning will hit) that one use for work AND family is not.

What's next? They are going to tax anyone who use 3-ply tissues?

What's excessive is the reach of our taxation and the lack of any actual study from industry experts. This will ultimately result people who have the means, but unwilling to "pay to play" to leave for somewhere else. Leaving only people who can't afford to leave in there.

Look at California... mid to high income classes are moving in masses because how fucked up their taxation is. Many of my friends who moved there for some decently high paying jobs (all in the mid 6 figure range when everything factored in) all left except one who's still at Google. And my uncle/cousins, who clear 7 figures every year moved out 2years ago. He figured he could save at least 10million in CA taxes over the course of 20yrs. As nice as the weather in SoCal is, it's not worth that amount of money. His word exactly "I could buy a few very nice cars for that money to rip it through TX highways". Not to mention his new home in TX is 2.5x the size of the one he had in CA.

Give it another decade or so. If Cali doesn't change, it would become a shithole state that no one with deep enough pocket would stay there.

[MarkyMark]

Nah... no one's leaving Vancouver except poor people, this much we already know.

Choices will need to be made, do you want the F150 that hauls shit, or do you want the fully loaded electric F150 that hauls shit and massages your back at the same time.

There's so many car choices under 100k it's ridiculous. If you can't find one you like for 99k then just admit you like the finer things in life and extra taxes make you angry. We don't have to pretend this is screwing over some poor enthusiast who saved 20 years for his dream car and now he's fucked.

[twitchyzero]

the overwhelmingly majority in north america buys used vehicles

cerb/wage subsidy/business grants are gonna have to come from somewhere

auto luxury tax certainly isn't new: it was set at 32K in 1997 (50K today's money)

https://autovance.com/digging-deeper...bc-luxury-tax/