This means no more 10% luxury levy on high-value boat purchases or imports in Canada – a policy change that brings significant savings and new opportunities for our clients.
This tax, introduced in 2022 under the Select Luxury Items Tax Act, imposed a 10% levy (or 20% of value above CA$250,000) on the sale, importation, or lease of personal-use vessels. As of Budget Day 2025, it no longer applies to yachts. The change is being enacted through a Notice of Ways and Means Motion and will be formalized in the upcoming Budget Implementation Act.
Key implications:
• No federal luxury tax applies to yacht purchases, imports, leases, or upgrades occurring after November 5, 2025.
- Registered vendors may wind down obligations under the Act, with one final return due.
- CRA will maintain vendor accounts for rebate processing through February 2028.
- Canadian yacht ownership structures designed primarily to mitigate luxury tax exposure may now be simplified.
- Domestic registration, repatriation of foreign-flagged vessels, and Canadian delivery of new builds are now fiscally neutral under federal law.
Marine industry groups have welcomed the repeal, noting suppressed sales, job losses, and offshore capital flight during the tax’s application. Removal of the tax is expected to stimulate Canadian yacht activity, improve GST/HST collections through higher sales volumes, and renew investment in domestic shipyards and marinas.
For yacht owners, brokers, advisors, and administrators, the repeal presents an opportunity to reassess Canadian flagging, importation strategies, and corporate ownership arrangements in a more favorable policy environment.
Rosemont Yacht Services continues to monitor legislative developments for yacht owners. We remain available to assist clients in navigating this transition, including registration planning, asset repatriation, and exit from legacy structures where appropriate.
rys@rosemont-yacht.comFor more information, please contact rys@rosemont-yacht.com