Canada lifts luxury tax on yachts

Canada’s 2025 federal budget has confirmed the removal of the luxury tax on private boats and aircraft, a move expected to revitalize the country’s superyacht and leisure marine industries. Introduced in September 2022, the levy had been widely criticized for stalling high-value yacht sales and reducing competitiveness in the North American market.

The tax, part of the Trudeau government’s earlier fiscal policy, applied to vessels valued at more than CA$250,000 (c. US$177,300) or aircraft exceeding CA$100,000 (c. US$70,900). It amounted to either 10% of the total value or 20 per cent of the amount above the threshold—whichever was lower. While the levy on luxury cars remains, its removal for yachts and aircraft is set to take effect from 5th November 2025.

Marine industry organizations, including NMMA Canada and the Canadian Marine Retailers Association (CMRA), campaigned heavily for the repeal, warning that the policy had led to job losses, reduced tax revenue, and a decline in yacht sales across Canada’s domestic market. – Full report