The Government of Canada tabled its first budget in two years this afternoon, and with it introduced a new tax on luxury goods including yachts, personal aircraft, and vehicles.
According to the official Budget 2021 document, the new tax is being added so that those who can afford to buy luxury goods can help with Canada’s economic recovery after COVID-19.
“If you’ve been lucky enough, or smart enough, or hard-working enough, to afford to spend $100,000 on a car, or $250,000 on a boat – congratulations! And thank you for contributing a little bit of that good fortune to help heal the wounds of COVID and invest in our future collective prosperity.”
The new tax impacts vehicles with retail sales prices over $100,000. It amounts to the lesser of 20% of the value above the threshold, or 10% of the full value of the “luxury car.”
This means both the Model S and Model X will be as much as 10% more expensive when the tax is implemented on January 1, 2022. The additional taxes will be collected at the point of purchase.
Model S
- Long Range: $114,990 → $117,988 (+$2,998, +2.6%)
- Plaid: $159,990 → $171,988 (+$11,998, +7.5%)
- Plaid+: $199,990 → $219,988 (+$19,998, +9.9%)
Model X
- Long Range: $124,990 → $129,988 (+$4,998, +3.9%)
- Plaid: $159,990 → $171,988 (+$11,998, +7.5%)
According to data from Statistics Canada, the provinces that will be most affected by this new tax include Ontario, Alberta, Quebec, and British Columbia.
The government expects the new tax to bring in as much as $34 million in revenue in the first year. It is expected to collect $604 million within five years of being introduced.
