The passing of the federal budget in July has stirred up plenty of conversation around Canada’s upcoming (and retroactive) luxury tax on spendy vehicles. In a nutshell, Daddy Government is introducing a levy on the sale or import of certain vehicles and aircraft priced above $100,000; and certain vessels priced above $250,000.

Since we’re gearheads around here, it’s the vehicle component in which we are most interested. But a close reading of the official documents reveal the application of this tax won’t necessarily end after a customer drives away with their shiny new ride.

In terms of the initial hit to yer wallet, the luxury tax will apply to the sale of subject vehicles priced above the $100,000 price threshold, payable at the time the sale is completed. This amount will be equal to the lesser of 10 per cent of its purchase price; or 20 per cent of the difference between its purchase price and the $100k threshold. Set to take effect September 2022, the measure also applies retroactively to sales agreements written after January 1, 2022.

For example, let’s imagine someone buys a new Porsche for $140,000. The luxury tax could be either $14,000 (10 per cent of the price) or $8,000 (20 per cent of the $40,000 spread over the threshold). Since the Tax Man has benevolently decided he will take the lesser of these two calculations, our customer’s deal sheet will list $8,000 as the taxation amount to be paid. This has been reported widely and is decently simple enough to understand, even to Bay-Street types who make a living playing with other people’s money.

But wait, there’s more: a section of this new tax code – listed far down in its description – describes how owners of these snazzy new whips will also be on the hook for so-called improvements to the vehicle. This could include the likes of a stereo system, vehicle wrap, and remote starter (those are the government’s examples, not ours).

canada’s vehicle luxury tax to take effect, also ding buyers for accessories

The value of those items will be added to the purchase price and a tax amount calculated using the same formula described above. In other words, if our customer adds a $6,000 wrap to their new Porsche, that amount will be added on top of the purchase price and the tax calculated accordingly. There’s a floor of $5,000 for taxing improvements.

Surely that’s it, right? Wrong. According to the government doc, there is now an improvement period which stretches out for an entire year after the vehicle is purchased. Rather than explain it in our own words, we will quote directly from the taxation playbook, using our Porsche customer as an example of how much will be owed on so-called improvements.

On September 22, 2022, a registered vendor sells a subject vehicle priced over $100,000 to a purchaser. The luxury tax applies to the subject vehicle at the time the sale is completed. During the improvement period between September 22, 2022, and September 22, 2023, the purchaser hires three service providers to install the following improvements on the subject vehicle: performance tires, an infotainment system, and an upgraded exhaust system. The total price of the improvements is $5,000. The purchaser is liable for the luxury tax on improvements made to the subject vehicle. The luxury tax will be payable on September 23, 2023.

How this will be policed remains unclear. Will there be a new arm of the RCMP formed, perhaps the Doing Improvements Careful Knowledge division? Are investigators going to be dispatched to every speed shop and aftermarket house in Canada to cross-reference and audit their sales with purchases of high-end cars? Will Trudeau himself visit your home and peel the wrap off yer Ferrari if you don’t pay up? The mind reels.

We’ll be reaching out to our MP for answers to these questions and more. Stay tuned.

Keyword: Canada’s vehicle luxury tax to take effect, also ding buyers for accessories

CAR'S NEWS RELATED

Best cars for a 'Love Bug' remake

Tennessee’s Yard Art The Thorndyke Special The Hot Rod The Hippie Van Jim’s Lamborghini Growing up, it’s safe to say my absolute favorite movie was Disney’s “The Love Bug.” As a kid living in a world before Pixar’s “Cars,” it was pretty much the best car movie. I loved ...

View more: Best cars for a 'Love Bug' remake

Audi timing belt tensioner prompts Utah bomb squad visit

An aftermarket timing belt tensioner found in a Salt Lake City apartment prompted a visit from the bomb squad this week after it was mistaken for a potential explosive device. Police partially evacuated the apartment complex in which it was found “out of an abundance of caution” and called ...

View more: Audi timing belt tensioner prompts Utah bomb squad visit

2023 GMC Sierra HD 2500 and 3500 will get more expensive

GMC Sierra HD pickups are about to get more expensive again after recently becoming more expensive, according to GM Authority. In July, GMC and Buick raised the prices on certain vehicles in their lineups anywhere from $975 to $1,675 by making the previously optional OnStar a standard feature. Next ...

View more: 2023 GMC Sierra HD 2500 and 3500 will get more expensive

Our week with EVs: Recapping the diverse collection of electric cars we tested

Mercedes-Benz EQB First Drive Review: Next electric Benz is a little different 2022 Chevy Bolt EV Road Test Review: Time to play EV, gas or airplane 2023 Genesis GV60 Road Test Review: The third of Hyundai Group’s E-GMP EVs is the fastest, but softest It may be hard to ...

View more: Our week with EVs: Recapping the diverse collection of electric cars we tested

Europe car sales lowest since 1996 after 12-month decline

BERLIN – Europe registered the lowest number of new passenger cars in the month of June this year since 1996 at just over 1.06 million vehicles, with some carmakers seeing sales drop by nearly 50%, data from Europe’s automobile association showed on Friday. Volkswagen Group was the hardest-hit major ...

View more: Europe car sales lowest since 1996 after 12-month decline

More Than Just A Carmaker: Toyota Motor PH Launches Toyota Mobility Solutions

Automotive industry leader, Toyota Motor Philippines Corporation (TMP) inaugurated today Toyota Mobility Solutions Philippines, Inc. (TMSPH), a wholly owned subsidiary that will be a provider of mobility-related services. TMSPH ventures into the development and offering of a range of ‘new mobility solutions’ that will enhance Toyota as a brand ...

View more: More Than Just A Carmaker: Toyota Motor PH Launches Toyota Mobility Solutions

'F1 22' feels fast and familiar | Gaming Roundup

‘F1 22’ impressions ‘Construction Simulator’ is launching Sept. 20 Autoblog may receive a share from purchases made via links on this page. Pricing and availability are subject to change. This week in racing game news: ‘F1 22’ impressions At its core, “F1 22,” the latest installment in the F1 ...

View more: 'F1 22' feels fast and familiar | Gaming Roundup

Watch a single-engine plane crash-land on 91 Freeway in California

A single-engine Piper Cherokee airplane was forced to crash land on the 91 Freeway in California after losing power about 45 minutes outside of Los Angeles. Yes, that means this was a very busy highway, practically bursting at the seams with traffic. No, amazingly nobody died, either in the ...

View more: Watch a single-engine plane crash-land on 91 Freeway in California

Ford files 'Mustang Dark Horse' trademark application

Make adventures more comfortable with high-quality Jeep grab handles

New Lucid Air variant to debut & Stealth Look to be on display during Monetary Car Week

Chevy offers incentives to prevent Corvette Z06 flipping

Average U.S. gas price falls below $4/gallon

German court: SUV driver must pay more than a car for running red light

Australian vehicle crash tests to include underwater performance

Toyota C-HR rumored to get revamp next year and an EV version

Geely's electric Zeekr 009 is an EV Alphard we never had; 700 km, 542 PS, top speed 190 km/h

A Newey, Brawn and Anderson row that shows F1 doesn’t change

Sorry, EV buyers, you won't get to pick your own pedestrian safety sounds

There won't be enough copper to meet climate goals, study indicates

OTHER CAR NEWS

; Top List in the World https://www.pinterest.com/newstopcar/pins/
Top Best Sushi Restaurants in SeoulTop Best Caribbean HoneymoonsTop Most Beautiful Islands in PeruTop Best Outdoor Grill BrandsTop Best Global Seafood RestaurantsTop Foods to Boost Your Immune SystemTop Best Foods to Fight HemorrhoidsTop Foods That Pack More Potassium Than a BananaTop Best Healthy Foods to Gain Weight FastTop Best Cosmetic Brands in the U.STop Best Destinations for Food Lovers in EuropeTop Best Foods High in Vitamin ATop Best Foods to Lower Your Blood SugarTop Best Things to Do in LouisianaTop Best Cities to Visit in New YorkTop Best Makeup Addresses In PennsylvaniaTop Reasons to Visit NorwayTop Most Beautiful Islands In The WorldTop Best Law Universities in the WorldTop Richest Sportsmen In The WorldTop Biggest Aquariums In The WorldTop Best Peruvian Restaurants In MiamiTop Best Road Trips From MiamiTop Best Places to Visit in MarylandTop Best Places to Visit in North CarolinaTop Best Electric Cars For KidsTop Best Swedish Brands in The USTop Best Skincare Brands in AmericaTop Best American Lipstick BrandsTop Michelin-starred Restaurants in MiamiTop Best Secluded Getaways From MiamiTop Best Things To Do On A Rainy Day In MiamiTop Most Instagrammable Places In MiamiTop Interesting Facts about FlorenceTop Facts About The First Roman Emperor - AugustusTop Best Japanese FoodsTop Most Beautiful Historical Sites in IsraelTop Best Places To Visit In Holy SeeTop Best Hawaiian IslandsTop Reasons to Visit PortugalTop Best Hotels In L.A. With Free Wi-FiTop Best Scenic Drives in MiamiTop Best Vegan Restaurants in BerlinTop Most Interesting Attractions In WalesTop Health Benefits of a Vegan DietTop Best Thai Restaurant in Las VegasTop Most Beautiful Forests in SwitzerlandTop Best Global Universities in GermanyTop Most Beautiful Lakes in GuyanaTop Best Things To Do in IdahoTop Things to Know Before Traveling to North MacedoniaTop Best German Sunglasses BrandsTop Highest Mountains In FranceTop Biggest Hydroelectric Plants in AmericaTop Best Spa Hotels in NYCTop The World's Scariest BridgeTop Largest Hotels In AmericaTop Most Famous Festivals in JordanTop Best European Restaurants in MunichTop Best Japanese Hiking Boot BrandsTop Best Universities in PolandTop Best Tips for Surfing the Web Safely and AnonymouslyTop Most Valuable Football Clubs in EuropeTop Highest Mountains In ColombiaTop Real-Life Characters of Texas RisingTop Best Beaches in GuatelamaTop Things About DR Congo You Should KnowTop Best Korean Reality & Variety ShowsTop Best RockstarsTop Most Beautiful Waterfalls in GermanyTop Best Fountain Pen Ink BrandsTop Best European Restaurants in ChicagoTop Best Fighter Jets in the WorldTop Best Three-Wheel MotorcyclesTop Most Beautiful Lakes in ManitobaTop Best Dive Sites in VenezuelaTop Best Websites For Art StudentsTop Best Japanese Instant Noodle BrandsTop Best Comedy Manhwa (Webtoons)Top Best Japanese Sunglasses BrandsTop Most Expensive Air Jordan SneakersTop Health Benefits of CucumberTop Famous Universities in SwedenTop Most Popular Films Starring Jo Jung-sukTop Interesting Facts about CougarsTop Best Hospitals for Hip Replacement in the USATop Most Expensive DefendersTop Health Benefits of GooseberriesTop Health Benefits of ParsnipsTop Best Foods and Drinks in LondonTop Health Benefits of Rosehip TeaTop Best Air Fryers for Low-fat CookingTop Most Asked Teacher Interview Questions with AnswersTop Best Shopping Malls in ZurichTop The Most Beautiful Botanical Gardens In L.A.Top Best Mexican Restaurants in Miami for Carb-loading rightTop Best Energy Companies in GermanyTop Best Garage HeatersTop Largest Banks in IrelandTop Leading Provider - Audit and Assurance In The USTop Best Jewelry Brands in IndiaTop Prettiest Streets in the UKTop Best Lakes to Visit in TunisiaTop Highest Mountains in Israel