Luxury Tax in Manitoba: Vehicles, Calculation, and Exemptions

If you’re buying a vehicle priced above $100,000 in Manitoba, the federal luxury tax in Manitoba adds either 10% of the full price or 20% of the amount over $100,000, whichever is less, on top of the 5% GST and 7% provincial retail sales tax. The tax is federal and identical across provinces, but Manitoba buyers pay more overall because both GST and RST are calculated on a base that already includes the luxury tax.¹

Which Vehicles Trigger the Tax

The tax applies to passenger vehicles that meet every one of these tests: designed primarily to carry people on roads, ten or fewer seats, gross vehicle weight rating of 3,856 kg or less, manufactured after 2018, and four or more wheels.² Most luxury sedans, coupes, SUVs, and light-duty trucks sold through Manitoba dealerships fit that description.

Two rules pull a lot of used vehicles out of the tax before price even enters the picture. A vehicle manufactured in 2018 or earlier is never subject. And any vehicle that was both registered with a government and delivered to a user before September 2022 is out, regardless of what it resells for today.² A 2020 model first registered in 2020 and later resold is exempt. A 2023 model reselling for $120,000 is not.

How to Calculate What You’ll Owe

Once a vehicle qualifies and the taxable amount exceeds $100,000, you run two calculations and pay the lower one:²

Formula A: 10% of the full taxable amount
Formula B: 20% of the amount above $100,000

On a $150,000 vehicle, Formula A produces $15,000 and Formula B produces $10,000. You pay $10,000. On a $400,000 vehicle, Formula A produces $40,000 and Formula B produces $60,000. You pay $40,000.¹ Formula B is lower up to $200,000; above that, Formula A caps the tax at 10%.

What Counts Toward the Taxable Amount

The taxable amount isn’t just the sticker price. For a domestic purchase, it’s the total consideration paid plus the value of any improvements the dealer makes in connection with the sale.³ Improvements are physical additions: upgraded stereo, body kit, engine modifications, wraps, window tinting. If you negotiate them as part of the sale, they’re in.

Trade-ins do not reduce the taxable amount. If you trade a $50,000 vehicle toward a $150,000 purchase, the taxable amount stays at $150,000. Down payments work the same way.³

A few items are specifically carved out of the improvements calculation: child safety seats, trailers or campers, and any equipment that adapts the vehicle for a wheelchair user or adds auxiliary driving controls for a driver with a disability.² Their cost isn’t added to the taxable amount, which can keep a borderline purchase under the $100,000 threshold.

Vehicles That Are Exempt

Some categories are excluded no matter the price:²

Ambulances and hearses.
Police vehicles, if clearly marked for policing activities.
Emergency response vehicles, if clearly marked and equipped for emergency medical or fire response.
Recreational vehicles designed for temporary residential use, if they include at least four of six amenities: cooking facilities, a refrigerator or ice box, a self-contained toilet, climate control independent of the engine, a potable water system with faucet and sink, or an independent electrical or propane power supply.
Vehicles registered with a government and delivered to a user before September 2022.
Vehicles manufactured in 2018 or earlier.

The RV rule matters for anyone eyeing a high-end motorhome. A Class A or Class C motorhome that meets the four-amenity test isn’t a subject vehicle at all, even well above $100,000.

What You Actually Pay in Manitoba

For CBSA accounting purposes, both GST and provincial sales tax are calculated on a base that equals the taxable amount plus the luxury tax itself.¹ Manitoba’s retail sales tax rate is 7%,⁴ and GST is 5%.⁵

Take a $150,000 vehicle. Luxury tax comes to $10,000. The value used for the sales taxes becomes $160,000. GST at 5% is $8,000. Manitoba RST at 7% is $11,200. Out the door: $179,200. Without the luxury tax layer, the same vehicle would total $168,000. The $10,000 luxury tax translates into roughly $11,200 in real added cost once GST and RST stack on top.

Importing a Vehicle

If you bring a vehicle into Canada, including driving one across the U.S. border into Manitoba, CBSA assesses the luxury tax at the border. The person liable for customs duty is also liable for the luxury tax.¹

The taxable amount for an import is the customs value plus any customs duties, excise taxes, or special import measures duties payable. GST, HST, and provincial sales tax aren’t part of that calculation. The same two-formula comparison then applies. Penalties and interest on imported vehicles are collected under the Customs Act, as if the luxury tax were a customs duty.¹

Leasing a Luxury Vehicle

Leasing doesn’t avoid the tax. When a registered vendor gives a lessee the right to use a vehicle valued above $100,000 that hasn’t been previously registered with a federal or provincial government, the luxury tax is payable by the vendor at the moment the lessee first gets use of it.³ Vendors typically pass that cost through in the lease terms. The full tax is determined at the start of the lease rather than spread across monthly payments.

Aircraft and Vessels No Longer Apply

The luxury tax originally covered private aircraft with 39 or fewer seats and recreational vessels priced above $250,000. Both categories were repealed effective November 5, 2025.¹ If you’re buying a boat or airplane in Manitoba going forward, the luxury tax doesn’t factor in. Only vehicles remain subject.

1
Canada Border Services Agency. Memorandum D18-4-1 – Select Luxury Items Tax on Importation
2
Justice Laws Website. Select Luxury Items Tax Act
3
Canada.ca. LTN2 Subject Vehicles Under the Select Luxury Items Tax Act
4
Government of Manitoba. Retail Sales Tax
5
Canada Revenue Agency. GST/HST Calculator (and Rates)