Canadian Government Eliminates 10% Tax on Aircraft and Vessels

The Canadian government has repealed its 10% luxury tax on aircraft and boats, effective November 5, 2025. The tax was introduced in 2022 and was criticized by industry groups for being inefficient and costly to administer. The repeal will simplify aircraft sales and leasing in Canada, and is expected to boost confidence in the business aviation market. The change was announced in Budget 2025, which also confirmed the elimination of the tax on aircraft valued above C$100,000 and boats above C$250,000. The Canadian Business Aviation Association welcomed the move, stating it will restore fairness for aircraft owners, operators, and vendors. The repeal applies to all sales, leases, importations, and improvements of aircraft and vessels, but the tax remains in place for high-value motor vehicles. The Canada Revenue Agency will issue special import certificates during a short administrative transition period.