Luxury Tax Increases

Sardinia Drops Luxury Yacht Tax

It would appear the world’s governments have decided that in return for bailing out the banks, we will be needing to pay for this by increased taxes in certain sectors, and what better place to start than the luxury sector? The Australian government passed a new tax law last year, increasing the amount of tax on a luxury car to 33%, although there seems to be a lot of confusion around this tax.

Hungary has just passed a new luxury tax law, which will be introduced in 2010 adding to the tax burden of luxury real estate, yachts and cars costing in excess of $150,000.

The British government plans a new 50% income tax rate for people earning more than £150,000 per annum. Gordon “no more boom and bust” Brown defended the increase as a necessary step to address the country’s growing budget deficit. Still – he also said the British economy was resilient and would weather the storm, which is admittedly a step backwards from his claims last month/week/yesterday that there was not going to be a downturn, and in any case it is certainly not his fault.

Thailand has just introduced a new luxury tax on internet use, which is rather entertaining as it seems the Western governments feel broadband internet access is vital to keep the economy rolling.

On a positive note, the New York Legislature rejected a new luxury tax on jewelry over $20,000 . Illinois also rejected a similar tax. Sardinia recently rescinded a $21,000 luxury tax that was being applied to visiting yachts after the amount of yachts berthing dropped by 50%. It seems you can’t get blood out of a stone after all so they will just have to print the money instead. Quantitative easing here we come.