Implementation of the Luxury Tax Effective September 1, 2022

Published On
August 19, 2022

Effective September 1, 2022, the Government of Canada will introduce a luxury tax on the sale or importation of motor vehicles with a retail sale price greater than $100,000. An overview of vehicles that will be subject to the new tax, how to apply it, and if you are required to register with the Canada Revenue Agency (CRA), under the Select Luxury Items Tax Act can be found on the Government of Canada website.

Please note that vehicle advertisements and contracts must remain compliant with the Motor Vehicle Dealers Act (MVDA), following the introduction of the new luxury tax.

Advertising and the new Luxury Tax

Registrants should note that advertised motor vehicle prices must be all-in. Only HST and licensing can be added to an advertised price as per the MVDA. As with other government levies, dealers may pass the luxury tax onto the consumer. However, if a dealer advertises a vehicle that is more than $100,000 and the luxury tax will be passed onto the consumer, the luxury tax must be included in the advertised price.

Questions about the new Luxury Tax

Dealers who have questions about the luxury tax are encouraged to contact the Government of Canada at 1-866-330-3304 or seek advice through their accountants, legal counsel or member organizations (e.g., UCDA, TADA etc.).

MVDA Questions

OMVIC’s dealer support team is available to assist dealers in achieving and maintaining compliance with the MVDA. Please contact the dealer support team at [email protected] or 1-800-943-6002 if you have any questions or concerns related to compliance with the MVDA.