Private Jets: When Tax Policy Moves the Market
From Trump’s bonus depreciation to Canada’s abandoned luxury tax, policy is shaping private aviation.
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Private aviation heads into 2026 with demand continuing to rise, especially in the United States, but the market is increasingly shaped by tax incentives, tariffs and regulation. A private jet is often closer to a racehorse than a car. Some aircraft are simply better bred than others, and when they are properly maintained they perform consistently, age well and retain long-term value. Models such as the Gulfstream G650 and G700, Bombardier Global 6000 and Global 7500, and Dassault’s Falcon 7X and 8X have established reputations as proven performers, making them particularly attractive on the pre-owned market for their range, reliability and operating economics.
It is no surprise that these types are favoured by high-profile owners from business leaders to entertainers, with public names such as John Travolta, Justin Bieber and Oprah Winfrey among those known to have operated long-range jets. While new aircraft remain in demand, it is the pre-owned market that is driving much of the current activity, especially for buyers seeking jets capable of operating efficiently on demanding routes. At the same time, policy decisions on both sides of the Atlantic are influencing how and where private jets are bought and sold.
Demand continues as ownership models evolve
Joshua Rubenstein, Partner and Global Chair, Private Wealth, Katten Muchin Rosenman, who leads the firm’s Private Wealth practice, advising high-net-worth individuals and families on estate planning, trust administration and related litigation, says demand across the private jet market remains strong. “There is no question that the demand for the private jet market has increased dramatically. The technology available on such flights has improved considerably, and of course voice and video calls while flying are permitted. Shared ownership options have become more flexible, as has the ability for cost effective exclusive ownership use. This is a trend that we can expect to see continue.”
Alongside technological advances reshaping how private aircraft are used, market activity has also been influenced by financial and policy considerations.
Tim Barber, EMEA Aircraft Sales and Acquisitions, Duncan Aviation, points to a surge in activity at the end of last year, driven in part by tax incentives. “There is no doubt that the One Big Beautiful Bill has driven the market towards the end of last year, as it did during Donald Trump’s last Presidency. Bonus Depreciation is a huge benefit to prospective buyers, and everyone wants the maximum amount before it drops down to the next banding. The number of pre-owned transactions closed in December was more than double those in November.”
Why bonus depreciation matters
Bonus depreciation is a US tax incentive that allows businesses to deduct a significant portion of the cost of qualifying assets, including business aircraft, in the year they are purchased and placed into service rather than spreading the deduction over several years. For buyers using aircraft primarily for business purposes, this can deliver a substantial upfront tax benefit, improving cash flow and making acquisitions more attractive. The allowance was previously set at 100 percent but is now being phased down in stages, with the deductible percentage reducing each year, which has encouraged buyers to accelerate transactions in order to secure the highest possible benefit before it drops to the next band.
Barber says. “Of course, aircraft transactions don’t necessarily correlate to the actual number of flights recorded but there was an uplift in the number of flights last year of 3.8% over 2024, with all regions of the world recording increased activity. Europe recorded the lowest growth, with the developing nations being amongst the higher performing regions.”
Buying activity can overstate true end-user demand.
The reason for this is aircraft may be purchased for fleet management, corporate structuring or resale rather than immediate use, meaning a rise in transactions does not necessarily indicate that more people want to fly privately. Flight data is a better indicator of demand, and the modest increase in flight activity implies steady growth rather than a surge.
US growth, tariffs and technology
Hannah Diss, Counsel, Ogier, highlights the strength of the US market while noting growing uncertainty around tariffs. “With a record-breaking 2025 under our belts, business jet activity rose 34% against pre-pandemic levels – we expect strong demand in the US market to drive further growth into 2026. That said, there will be jitters among manufacturers negotiating the uncertain backdrop of US tariffs and economic leverage.”
“Time will tell whether the White House’s threat to deregister Bombardier jets and levy a 50% tariff on Canadian aircraft will happen, or if European-made jets will be next in the firing line. Could 2026 be the year Taylor Swift swaps her Dassault for a Gulfstream?”
Dassault jets are attractive to someone like Taylor Swift because they are designed for long-range, high-reliability global travel with strong privacy and performance credentials, rather than flash. In practical terms, Dassault Falcons are known for exceptional range, allowing non-stop transatlantic and intercontinental flights, which suits a touring schedule with tight timelines. They perform well into smaller or more challenging airports, offering flexibility and discretion. The cabins are quiet, well-built and designed for long hours in the air, and the aircraft have a reputation for reliability and safety, which matters when travel is frequent and time-critical. They also hold their value well.
Diss adds, “All other roads lead to the tech and AI revolution, and the private aviation industry is well positioned to benefit from these advancements. From sleek app-based memberships offering on-demand jet access for a new generation of traveller, to AI-powered route planning, emission monitoring and even inflight mood lighting, there is much to be excited about in the next 12 months.”
While technology is reshaping how private aviation is accessed and operated, demand is ultimately being channelled through increasingly complex ownership and tax structures.
Family offices, tax planning and cross-border complexity
Jonathan Epstein, a partner in the Washington, D.C. office of Holland & Knight law firm, specialises in international trade and aviation law, advising a wide range of clients on business aircraft transactions and the legal and regulatory structures around private and corporate jet ownership and operation. He says his firm has seen increased transaction activity, particularly involving family offices.
“Our firm saw a marked increase in private jet transactions in 2025, despite complexities created by tariffs; we continue to see family offices heavily involved in optimizing how the private jet ownership and operation are structured. We expect this pace of work to continue into 2026, for our aviation, tax attorneys, and private wealth attorneys in London, Dallas, Miami, New York, and Washington D.C.”
“In the U.S. the reinstitution of bonus depreciation as aforementioned, allowing qualified owners to depreciate 100% of the value of the aircraft in year one, created additional demand for new and used aircraft as well as ownership of fractional interests. However, there are several hurdles to qualifying for bonus depreciation which have kept our tax team busy.”
He also points to tariff uncertainty affecting cross-border deals.
“The imposition of substantial tariffs on imports into the U.S. of goods origination in the EU, the UK, and other countries impacts cross-border private jet transactions, as historically civil aircraft and associated parts could enter the U.S. duty free. Subsequently, duties for civil aircraft of EU, UK, and Swiss origin were reduced back to zero. However, tariffs on certain Canadian aircraft and parts and uncertainty as to future tariffs remain a concern that need to be addressed in cross-border aircraft transactions.”
Pre-owned aircraft driving activity
While manufacturers’ order books remain strong, delivery timelines are pushing many buyers toward pre-owned aircraft.
Tim Barber, Duncan Aviation, notes. “Manufacturer order books remain strong and there are plenty of models that you’ll be waiting 2 years or more for.”
For many buyers, particularly those flying city to city or operating on challenging routes, pre-owned aircraft offer immediate availability and known operating performance. In contrast to automobiles, business jets can hold their value well, with demand and limited supply at times pushing resale prices higher.
Technology and changing client behaviour
Toby Edwards, co-CEO at Victor, which is a global on-demand private jet charter platform that connects clients with charter aircraft through a digital platform and who has been backed by an Abu Dhabi-based aviation investment group since 2023., says the most significant change is how clients are making decisions. “From our perspective the biggest shift in the private jet market is not simply about growing demand, but about how clients are behaving and making decisions.”
“In 2025, our flight activity increased by 19.5% year-on-year, but the more meaningful change has been in the way clients are using our platform to plan and compare their travel. The Victor app has now surpassed 100,000 downloads, and we are seeing a growing group of clients, particularly younger and more experienced charter clients, approach private aviation with the same expectations of ease and transparency they would have when booking a hotel, an Airbnb or an Uber.”
“Unlike other brokers, for us, transparency is built into the service we provide. Through the app and our digital platform, clients can see real photographs of the specific aircraft being quoted, clearly identify the operator behind each flight, and compare options on a like-for-like basis, including the exact cabin layout and estimated fuel burn.”
He adds that aircraft choice and mission complexity are increasing.
“Clients increasingly select larger, longer-range aircraft for more demanding trips that involve more variables than a short, point-to-point flight, reflected in the strong growth we saw last year in bookings for models such as the Challenger 850 and Global Express. The ability for them to make informed, confident decisions has become far more valuable than simply securing the quickest price.”
A look at the jets
Challenger 850
The Challenger 850 has one of the widest cabins in its class, which makes a noticeable difference on longer flights. It is often configured with multiple seating zones, allowing passengers to work, dine and rest simultaneously. The cabin is quiet and stable, with excellent baggage capacity that is accessible in flight, which is useful on multi-city trips. Its ability to operate efficiently from a wide range of airports also makes it well suited to city-to-city travel without sacrificing cabin comfort.
Global Express
The Global Express is designed for true long-haul flying and is known for its exceptional range and endurance, enabling non-stop intercontinental routes. The cabin is typically divided into three distinct living zones, often including a private stateroom and full-size galley, making it feel closer to a flying apartment than a jet. It cruises at high altitude above much commercial traffic, resulting in a smoother ride, and is engineered for low cabin altitude, which reduces fatigue on very long flights. Advanced avionics and flight-management systems support efficient routing and reliability on complex global itineraries.
Canada recalibrates after luxury tax repeal
Benjamin Gross, Partner, co-lead of aviation law group at Fasken in Montreal, who have more than 900 lawyers, has over 25 years’ experience advising on aircraft finance and transactions, describes a steadier Canadian market.
“The Canadian private jet market remained relatively steady in 2025, showing slight growth in usage. Corporations and high net worth individuals seek flexibility and a luxurious, hassle-free, and time-sensitive experience, which aligns with their physical and mental wellness goals. They also want a confidential flight, and space where they can continue to work freely despite being somewhere over the clouds on their way to their next destination.” He adds. “Charter and jet card programs have made private jets more accessible.”
He notes the impact of the now-scrapped luxury tax.
By way of history, Canada introduced a federal luxury tax on private jets, yachts and other high-value items which came into effect inSeptember 2022 under the government of then-Prime Minister Justin Trudeau. That tax was scrapped in 2025 as part of Canada’s 2025 federal budget under Prime Minister Mark Carney.
Gross says. “Sales of new and used jets were somewhat hampered by the luxury tax, which the Canadian government scrapped in the Budget. This news was welcomed by all industry players.”
Looking ahead, he expects regulatory and technological developments to support growth.
“In 2026, we expect regulatory modernization, which we hope will allow for harmonizing and simplifying some of the red tape around transactions. We also expect an increase in the use of AI tools for flight planning, automatization systems, and maintenance.”
High-value assets, high-stakes disputes
Behind the optimism around regulation and technology, the reality of private aviation remains legally and operationally complex, with high-value assets exposed when deals go wrong, from cross-border ownership disputes to aircraft being detained over unpaid debts or sanctions concerns.
Visibility and enforcement risks
Paul Jebely, Partner and Vice Chair, International, at boutique law firm Sterlington in New York has served as lead counsel on approximately $23 billion in aircraft transactions. He offers a more strategic view on private jet visibility and enforcement. “I very recently helped a private client recover a seized Airbus ACJ in Asia using a worldwide freezing order and coordinated enforcement strategy. When it works, it works. But it is not child’s play.”
An Airbus ACJ is the private, VIP version of a commercial Airbus airliner. Instead of carrying airline passengers, ACJ aircraft are fitted with bespoke interiors that can include private bedrooms, showers, meeting rooms and lounges, effectively functioning as flying residences. They are typically used by heads of state, royal families, ultra-high-net-worth individuals and corporations that need long-range, high-capacity aircraft with exceptional comfort and security.
Jebely continues saying, “We are in a period where private aviation needs to think very carefully about visibility and positioning.”
Jebely refers to a combination of factors: increased regulatory attention, sustainability particularly around high profile activist groups, greater transparency driven by digital tracking and data sharing, tougher sanctions enforcement, and a more sensitive public and political climate around wealth, luxury assets and cross-border movement.
Jebely adds, “In periods like this, restraint is strategy. The public trend is part of a wider wave of frustration and resentment toward the ultra-wealthy. It is bigger than aviation.”
Conclusion
Private aviation in 2026 remains buoyant, led by strong demand in the United States and an active pre-owned market. At the same time, tax incentives, tariffs and regulation are playing a growing role in shaping behaviour, structuring and buying decisions. Canada’s decision to abandon its luxury tax and the US reintroduction of bonus depreciation underline how quickly policy can redirect capital. As governments continue to influence the market, private aviation is adapting, not slowing, but doing so with greater attention to tax, regulation and long-term planning.
Joshua Rubenstein’s Citywealth Leaders List profile
Katten Muchin Rosenman’s Citywealth Leaders List profile
Ogier’s Citywealth Leaders List profile
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