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Luxury Tax Removal: What It Means for High-Value Goods Buyers
As of November 5, 2025, luxury tax in Canada no longer applies to private aircraft and vessels—buyers should act quickly to maximize savings before potential future changes.
By NomadicTax Research Team • 5-8 min read • November 23, 2025
## Luxury Tax and the Select Luxury Items Tax Act
Canada’s **Select Luxury Items Tax Act** imposes a luxury tax on high-value aircraft and vessels, cars with MSRP above $100,000, and private aircraft & vessels subject to luxury classification. ([canada.ca](https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/luxury-tax/technical-information.html?utm_source=openai))
## Recent Change: Removal on Subject Aircraft & Vessels
- As announced in **Budget 2025**, **effective November 5, 2025**, the **luxury tax is no longer payable** on **subject aircraft** and **subject vessels**. ([canada.ca](https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/luxury-tax/technical-information.html?utm_source=openai))
- This is one of several concessions to high net-worth purchasers in sectors like aviation and marine industries. It reduces cost and taxable barrier for acquisition of such items.
## Who Is Affected & What’s the Impact
### Affected Purchasers:
- Individuals or entities buying a **private aircraft that meets the "subject aircraft" definition** under the Act.
- Purchasers of **subject vessels**, which are legally defined based on size, cost, use, and other parameters. Check the Act for exact definitions. ([canada.ca](https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/luxury-tax/technical-information.html?utm_source=openai))
### Impact Measures:
- **Immediate cost savings**: the luxury tax (which could be a significant percentage) will no longer be in the purchase price as of Nov 5.
- **Increased demand/investment** in these sectors—manufacturers and brokers like Bombardier are projecting **job creation** as a result. ([reuters.com](https://www.reuters.com/business/bombardier-estimates-creating-about-600-jobs-over-coming-years-due-end-canada-2025-11-04/?utm_source=openai))
## How To Benefit Now
- If you're planning to buy a subject aircraft or vessel, **delay purchase until after Nov 5, 2025**, or check if the purchase can be recognized under definitions effective after the change.
- Check vendor invoices carefully—ensure no portion of luxury tax is charged post-Nov 5.
- For recent payments or contracts signed before Nov 5, explore whether transitional rules, refunds, or rebates apply.
## Considerations & Caveats
- Definitions matter: what constitutes a **subject aircraft or vessel**? Size, weight, MSRP, purpose may all be relevant.
- Other taxes or fees still apply (excise duties, import fees, H.S.T/G.S.T etc.). The removal of one tax doesn’t erase all associated costs.
- Future government budgets might revisit luxury tax policies—this could be a temporary removal.
## Bottom Line
Removing the luxury tax on subject aircraft and vessels starting Nov 5, 2025, offers a clear financial advantage for buyers in these categories. If this applies to your planned purchase, you could be saving thousands—or more. Act swiftly to benefit under the new rule.