Question for Canadian reservation holders: is the upcoming Canadian luxury tax making you downgrade?

[HRoussel]

I'm curious to know if I'm the only one here being 'cheap' and not wanting to pay an extra 10k or more in tax on my car. I went from Touring to Pure for that reason.

 

[MPawelek]

It depends on your income and whether this is a huge purchase for you or just spare change.

Modern governments suck the financial hearts out of hard working people. Rant over….

 

[wristybusiness]

The tax is 20% of the MSRP over 100k or $10k whichever is less.
For the Touring the pre-June 1st price is approximately $130k making the tax approximately $6k. Still a decent amount, but less than the $10k you were suggesting. I think you were using the post-June 1st price.

Please correct me if I am wrong.

To answer your question, yes it is a enough for me to downgrade to the Pure. I was torn before hand and was going to bite the bullet and pay extra for the Touring mainly to get the car earlier, but the extra tax on top seals the deal. I will be going with the Pure.

 

[Pragmatic]

If Lucid's price were $6K higher would you still downgrade? While not a fan of taxes I always ask myself this type of questions. If the answer is no I'll make the purchase. Because I should be buying based on if what I'm paying is a fair price for what I'm getting not on where the money is going. This is similar to the US tax credit. If the credit was not available on a Lucid would you buy the lower end model to make up for the higher cost?

 

[HRoussel]

The tax is 20% of the MSRP over 100k or $10k whichever is less.
For the Touring the pre-June 1st price is approximately $130k making the tax approximately $6k. Still a decent amount, but less than the $10k you were suggesting. I think you were using the post-June 1st price.

Please correct me if I am wrong.

To answer your question, yes it is a enough for me to downgrade to the Pure. I was torn before hand and was going to bite the bullet and pay extra for the Touring mainly to get the car earlier, but the extra tax on top seals the deal. I will be going with the Pure.

I decided to put the numbers in a spreadsheet to get a clear picture.

Note that all amounts are in CAN$. I rounded a few numbers for clarity.

So my original Touring order was $138,800. The amount above $100K is $38,800 * 20% = $7760. However the standard federal tax also applies to this tax (yep, no kidding!), which results in $8148.

In comparison my Pure order is $114,000 (if I include the AWD option). Doing the calculation I get an extra $2940 in luxury tax.

When adding all the zillions taxes (federal, provincial, luxury), my original Touring was coming to $168,000. The Air Pure, $134,000.

 

[wristybusiness]

I agree with the line of thinking that looks at net cost to me rather than looking at where the money is going (luxury tax or not). When I mentioned I was on the fence it was because it was already at the limit of what I was comfortable spending on a second vehicle. The increase in cost, regardless of its source, puts it outside that threshold.

The fact that there is a tax on a tax is absurd and highlights the thought put into this new policy. Nevermind the fact that inflation means that this arbitrary threshold will need to be revisited in the future. I also feel that EVs should be exempt since the initial models need to be expensive to fund future less expensive models. Tesla being a prime example. However the merits (or lack thereof) of the tax are beyond the intended scope of the post.