Liberals’ cutting luxury tax on private jets, yachts, but not pickup trucks

Carney quietly removed the luxury tax on private jets and yachts in Budget 2025 while keeping the tax firmly in place on working Canadians’ tools like pickup trucks and farm equipment.

Source: Facebook

Prime Minister Mark Carney quietly removed the luxury tax on private jets and yachts in Budget 2025 while keeping the tax firmly in place on working Canadians’ tools like pickup trucks and farm equipment.

The Carney government’s recent budget proposes to eliminate the “inefficient” Underused Housing Tax and the luxury tax on private aircraft and vessels to create “administrative savings” for the Canada Revenue Agency.

The Underused Housing Tax added a one per cent federal tax on the ownership of vacant or underused housing. It was implemented in 2002 to reduce foreign ownership of Canadian property by non-residents.

Meanwhile, the luxury tax applies to vehicle purchases over $100,000, and was updated in 2023 to apply to private jets, helicopters and seaplanes. It also applies to certain vessels, such as yachts and sailboats.

“How does Mark Carney look at the landscape in Canada, see all those people lining up at food banks, young people moving back into their parents’ basement because they can’t afford housing, and arrive at this,” said Conservative House Leader Andrew Scheer in a video posted to social media.

“When I talk to my friends and neighbours, they’re looking at ways to bring down their grocery bills. They’re literally cutting out beef and all the extras just to make ends meet. When Mark Carney goes around the room at the country club and says, ‘what do you guys feeling the pinch on?’”

The Liberals’ budget claims the removal of the luxury tax for private jets and yachts will “provide relief to the aviation and boating industries and increase the overall efficiency of the luxury tax framework.”

“Budget 2025 announces the government’s intention to end the luxury tax on aircraft and vessels as of the day after Budget Day,” the document stated.

The Carney government also claimed the change would save the CRA money by winding down business units “no longer connected to government priorities,” including those dedicated to the scrapped digital services tax, the federal fuel charge, and the individual and business consumer carbon price.

Scheer said the new budget doesn’t include a “single measure to bring down home prices, not a single measure to bring down grocery prices, not a single measure to bring down inflation.”

“Nothing to take off the taxes on grocery, farming or production. Instead, a tax break on private jets and yachts. That’s Mark Carney’s idea of making life more affordable.”

Scheer also noted that by keeping the luxury tax on vehicles over $100,000, many Canadian farmers and tradespeople will still be penalized when they are required to purchase one for work.