By Canadian Press

Luxury goods tax on super-rich could hit green cars: experts

Aug 11, 2022 | 10:50 AM

OTTAWA — Tax experts are warning a new tax on yachts, luxury cars and private aircraft designed to hit the super-rich could also cover some electric and hybrid cars. 

A luxury goods tax, which will come into force in three weeks, will cover cars and SUVs, as well as private planes and helicopters worth more than $100,000.

The federal government will also bring in a tax on Sept. 1 on superyachts and motorboats worth more than $250,000.

Adrienne Vaupshas, a spokeswoman for Finance Minister Chrystia Freeland, said the measures, originally proposed in the 2021 budget, are very popular with the public and are not designed to hit the middle class. 

The tax amounts to either 10 per cent of the taxable amount of the vehicle or 20 per cent of the amount over the price threshold — whichever is less.

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But senior tax lawyer Héléna Gagné says it could hit some electric and hybrid vehicles, such as certain Teslas, as well as planes bought by enthusiasts as a hobby. 

This report by The Canadian Press was first published Aug. 11, 2022. 

The Canadian Press