Originally campaigned on back in 2019, and then released in the 2021 federal budget, the luxury vehicle sales tax is set to take hold this September. If you are planning on a NEW car or aircraft with a purchase price over $100,000, or a new boat over $250,000 (Mastercraft X-Star anyone), you better get that done and settled prior to the fall. 

 

But what does the PBO (Parliamentary budget office) think about this? The total take on the new tax would yield around $200 million per year, for the next five years. In the grand scheme of things.....not really a needle mover......at least when it comes to government finance. (perhaps when it comes to garnering votes, the math is different)

 

How about consequences? There are always intended and unintended consequences to changes in the tax legislation. The PBO estimates, that sales in the luxury vehicle (planes boats and automobiles) will drop by 15% in the next 5 years leading to a loss in sales revenue of approximately $2.9 Billion.....more than double the injection to government coffers. That is fewer sales reps, fewer techs, smaller dealerships perhaps......those numbers were not disclosed in the article you can find here.

 

Seeing as this is a financial planning and investment blog, what am I getting at? If you were thinking of splurging on a new "toy" soon.....better get while the getting is still good,