Before buying a car in Canada, it is important to consider thisCUBAthat the seller may charge a fee. British Columbia car sales tax can drastically change the total amount you have to pay.
In British Columbia, several factors can affect the amount and type of tax you pay on a new or used car, including: B. where you buy it, how much it costs, and what type of vehicle it is. Let's look at how much sales tax you'll have to pay when you buy a car in BC.
What is the car sales tax in BC?
When you buy a car in British Columbia, you must pay Federal Goods and Services Tax (GST) and Provincial Sales Tax (PST). Together, this is referred to asHarmonized Sales Tax (HST).
If you buy a vehicle from a dealership in BC or anywhere in Canada, you will have to pay a 5% GST. This is a federal tax amount that all Canadians pay. However, the PST rate in BC can vary between 7% and 20%. The amount you pay depends on the selling price of your car and whether you buy the car privately or from a dealer.
What is the new car sales tax in BC?
In Canada, you must pay a standard 5% VAT on every new vehicle purchased from a dealership, regardless of the province or territory in which you purchased it. You also have to pay 7% to 20% VAT.
- If you buy a car in BC for less than $55,000, you will pay 7% PST
- Combined with the 5% state GST, you pay a subtotal of 12% HST
What is the used car sales tax in BC?
Used cars may be taxed differently in British Columbia depending on how they are sold. For example, when you buy a used carfrom a dealer, you usually pay the normal combination of 5% GST and 7% – 20% PST which makes up the total HST.
Do you pay sales tax on private cars in BC?
When you buy a used carfrom a private seller, you only need to pay PST. However, note that while no GST is charged, you will have to pay a 12% PST fee (for vehicles under $125,000) to cover the difference.
Please note that while buying a car from a dealership or online dealership is easy enough as taxes are collected at the point of sale, paying taxes on a private sale is a bit more complicated as PST is not collected until the car is registered and accounted for and is collected by the ICBC.
When you register a car, the Insurance Corporation of British Columbia compares the purchase price to the fair market value of the vehicle. Using this information, they calculate your PST rate, preventing buyers from cheating the system to pay less PST. If you disagree with your estimate, you should get a professional opinion.
How does car price affect BC car sales tax?
Vehicle sales tax in British Columbia is calculated based on the type of vehicle you are buying and the type of sale. While you may think you're paying a one-time price for a car, sales tax can significantly increase the actual cost. The only way to know for sure is to add any PST and/or GST charges that may apply to the final sale.
BC New or Used Car Sales Tax: Dealer vs. Private Sales
|Tax on cars at dealerships||Tax on cars sold to private individuals|
|PST||7% (cars under $55,000)||12% (cars under $125,000)|
How luxury cars are taxed in BC
The "luxury car tax" in BC actually refers to the thresholds at which PST rates begin to increase by more than 1%. Whether you buy a new or used car from a dealer or private seller, the amount of PST you pay depends on the original purchase price.
PST Sales Tax on Luxury Cars in BC: Dealer vs. Private Sales
|Tax on cars at dealerships||Tax on cars sold to private individuals|
|Less than $55,000||7%||12%|
|US$55,000 – US$55,999||8%||12%|
|US$56,000 – US$56,999||9%||12%|
|US$57,000 – US$124,999||10%||12%|
|US$125,000 – US$149,999||15%||15%|
|$150,000 or more||20%||20%|
In other words, if you are thinking of buying a luxury car, you should be prepared to pay more taxes. For example, let's say you're looking at a $140,000 Ferrari from a dealership in British Columbia:
- You pay 15% PST
- 15% of $140,000 = $21,000
- You will also pay 5% VAT (resulting in an additional tax of $7,000).
- $21,000 + $7,000 = $28,000 in additional taxes
- For a $140,000 Ferrari, you'll pay a total of $168,000
- The same car from a private sale costs $161,000 (counting PST only)
Are there tax breaks for buying a zero emission electric car in BC?
When you buy a zero emission deviceelectric vehicle (EV)Receive in BC from a reseller or private seller, you may qualify for a lower PST amount:
|Less than $75,000||7%|
|US$75,000 to US$75,999||8%|
|US$76,000 to US$76,999||9%|
|US$77,000 to US$124,999||10%|
|US$125,000 – US$149,999||15%|
How to Calculate BC Car Sales Tax
To calculate sales tax when buying a car in BC, just follow these steps:
- Determine the purchase price of the car
- Multiply the purchase price by the tax rate to determine the amount of tax due
- Add the tax owed to the purchase price of the car to get the total amount owed
Here's a table showing how much car sales tax can cost in BC. To give you a better idea, let's say you buy a car from a dealership (which means you'll be charged GST and PST):
|Car price before sales tax||CUBA||Car cost after sales tax|
|45.000 $||$2,250 (5% VAT) + $3,150 (7% VAT)||50.400 $|
|55.000 $||$2,750 (5% VAT) + $4,440 (8% VAT)||62.190 $|
|56.000 $||$2,800 (5% VAT) + $5,040 (9% VAT)||63.840 $|
|57.000 $||$2,850 (5% VAT) + $5,700 (10% VAT)||65.550 $|
|125,000 US dollars||$6,250 (5% VAT) + $18,750 (15% VAT)||150.000 $|
|150.000 $||7,500 USD (5% VAT) + 30,000 USD (20% VAT)||187.500 $|
How Sales Tax Affects Your BC Car Loan Cost
Due to interest and additional charges, things can get a little more expensive and complicated for you.Financing a vehicle with a car loanin BC Sales tax is usually included in the final price and can increase the total amount you need to borrow.
For example, if you want to buy a $45,000 car at a BC dealership, you will be charged 12% HST (5% GST + 7% PST). Adding the amount of sales tax to the car loan affects the total cost of the car.
Here is a table showing the cost difference between adding VAT and prepaying the loan.
|Car loan with no sales tax||Sales tax car loan|
|Autopreis||45.000 $||45.000 $|
|Motor vehicle sales tax (12%)||$5,400 (prepaid)||$5,400 (added to car loan)|
|Deposit (10%)||4.500 $||4.500 $|
|Total amount to finance||40.500 $||45.900 $|
|expression||60 fun||60 fun|
|credit payment||781,10 $||885,24 $|
|total interest cost||6.365,80 $||7.214,57 $|
Tips to minimize the impact of vehicle sales tax on car prices and credit
In BC, you can minimize the impact of car sales taxesTrade in your old vehicle, which can result in a lower price for the car you want. Because you pay less to buy the car, you may qualify for a lower PST rate, as well as lower loan payments, if you choose to finance. Be sure to negotiate the price of a car to include sales tax.
That's why some people prefer to trade in their old car instead of selling it privately. Even if you get a better price at a private sale, selling the car can take a lot of time and money. However, if your current car has a reasonable trade-in value, you can get close to that price or better, especially after accounting for sales tax.
- Looking to buy a new $40,000 sedan in BC
- You trade in your existing hatchback for $5,000
- You then pay 12% HST ($4,200) on $35,000 instead of 12% ($4,800) on $40,000
- Save $600 when you trade in your old car
Other costs to consider
Before buying a car in BC, you should consider all other possible costs, including:
- AirCare -AirCare is a mandatory vehicle emissions testing program in certain areas of British Columbia. If you buy a car in an AirCare area, you may need to test drive it and get a certificate to register it. The price of an AirCare assessment varies depending on the location and type of vehicle you are purchasing.
- Vehicle Registration -When you buy a car in BC, you must also register it with the provincial government. The amount you end up paying in registration fees depends on the make, model, weight and year of manufacture of the vehicle.
- Safe -BC drivers must have a minimum valueliability insurance. While premiums will still depend heavily on the make and model of your car, your driving history will also be a big factor here.
- Merchant Documentation Fees -When you buy a car from a BC dealership, you usually have to pay the cost of processing all the relevant paperwork. Documentation fees vary by policy and type of vehicle at your dealership.
Canada tax credit versus tax credit
Going Green: Tax credits, rebates and government programs
What do lenders look for when offering private sale financing?
Thinking of buying a car in BC?
So don't forget to add all the taxes and other charges you incur when closing the sale, as this could result in you paying a lot more for a car than you would like. Also, there are many different costs to consider when the car is in your possession. For more information about vehicle taxation in British Columbia (or other provinces), contact Loans Canada.
BC Auto Sales Tax FAQs
How does ICBC determine the value of a used car for PST?
When you register a motor vehicle with ICBC, they use the Canadian Black Book Valuation Guide to value your car. The PST rate is applied to the greater of the vehicle's purchase price and book value.
How Can You Avoid British Columbia's Luxury Car Tax?
The luxury car tax only applies to new vehicles costing more than $55,000. then buy onecheaper carcan help you avoid higher sales tax.
Do you save on taxes when you change cars in BC?
Yes! If you sell your existing car privately, you will have to pay tax on the full sales price. However, if you trade it in at a retail store, the total sales price is reduced and the sales tax is usually applied as a credit, which can save you money overall.
PST is generally payable at the time the vehicle is registered with your Autoplan Broker. However, if you delay registering the vehicle, you may be required to pay PST directly to the B.C. Ministry of Finance. The general PST rate on private vehicle sales and gifts of vehicles is 12%.Does Canada have sales tax on cars? ›
Any vehicle purchased in Canada is subject to a Canadian HST or GST tax. Vehicles purchased in the province of Ontario (this includes Copart locations in London and Toronto) will be subject to a 13% HST tax.What are the taxes when buying a car in Canada? ›
Car Sales Tax for New and Used Cars in Canada
When buying a new or used car at a dealership, a 5% federal Goods and Services Tax (GST) and variable Provincial Sales Tax (PST) apply. In some provinces, GST and PST are combined and referred to as the Harmonized Sales Tax (HST).
Generally, the rate of PST is 7% on the purchase or lease price of goods and services, with some exceptions.How to avoid B.C. luxury car tax? ›
LST does not apply on Pre-Owned Vehicles. LST only applies to new vehicles over $100,000 sale price. Vehicles under $100,000 are excluded from the LST.What is the cheapest province to buy a car in Canada? ›
Cheapest provinces to buy a car in Canada
The cheapest place to buy a car in Canada is in the Atlantic region, according to the AutoTrader December 2022 Price Index. The 2022 data reveals that the average price of a new car in the region is $53,900, with used cars selling for an average of $44,935.
1. Alberta (no sales tax) Alberta is the only province that does not have its own sales tax, relying instead on its oil revenues.Are taxes included on price tags in Canada? ›
The main thing to remember is that in Canada, sales taxes (GST+PST or HST) are NOT included on the sticker price. You're basically “discovering” how much you will pay at the cash register, and it may make a difference, especially for bigger purchases.Is it cheap to own a car in Canada? ›
Across Canada, the total cost of ownership for a car is approximately $1,077 per month when you include all your car payments, gas, maintenance, and auto insurance costs. Experts recommend that your car expenses should not exceed 15% to 20% of your monthly take-home pay.What fees should I pay when buying a used car Canada? ›
When buying a used car in Ontario, you'll pay 13% HST, a vehicle permit fee and potential licence plate fee. If you're getting a new or replacement licence plate, you'll pay $59 for the plate and vehicle permit. If you're keeping your current licence plate, you'll pay $32 for the vehicle permit.
Quebec has the highest taxes of all the Canadian provinces and territories but also finances a larger number of services than the other governments, such as colleges, universities, community health clinics (CLSCs), daycare, and more.Does B.C. have high tax? ›
Secondly, it's not clear B.C.'s high tax rates even achieve the stated goal of generating substantial new government revenue. Why? Because high tax rates reduce incentives for production and dampen economic growth, which shrinks the size of the underlying tax base.Which province in Canada has the lowest taxes? ›
Alberta has the lowest taxes out of all the Canadian provinces. Alberta has the lowest taxes for a few reasons, one being that Alberta has the highest basic personal amounts in Canada. Alberta's basic personal amount is $19,369, and in comparison, the federal basic amount is $14,398.How much is $140,000 after taxes in BC? ›
If you make $140,000 a year living in the region of British Columbia, Canada, you will be taxed $43,850. That means that your net pay will be $96,150 per year, or $8,012 per month.What is Canada luxury car tax in BC? ›
Though the 2023 BC Budget is ostensibly focused on “affordability”, it leaves a lot to be desired when it comes to increasing affordability for workers and families that rely on automobiles for their work and daily life, according to NCDA President and CEO Blair Qualey.Can you gift a car in BC? ›
Both the donor(s) (the person giving the gift) and the recipient(s) (the person receiving the gift) must sign this form at or before the time of registration or transfer of the vehicle.Are new cars cheaper in Canada or USA? ›
Car Prices Are Generally Higher In Canada
The reasons behind this vary. However, the main reason is that more vehicles are manufactured in the US and then imported to Canada by the manufacturers. This automatically increases the price.
You must pay taxes and/or duties when applicable to bring your vehicle through Canadian customs. Your vehicle must be clear of any recalls. It must then pass an inspection by the Registrar of Imported Vehicles (RIV) in Canada before it can be officially considered imported.Are cars cheaper in winter in Canada? ›
The benefits of waiting to buy a used car
Many vehicle sellers offer better deals over the winter for two main reasons. Because spring and summer are busier months in terms of overall vehicle sales, private sellers and dealers are well-advised to offer cost-savings in the off-season to help keep their inventory moving.
The only five with no state sales tax are Alaska, Oregon, Montana, Delaware, and New Hampshire.
What states have no sales tax? There are five states with no general statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. These are sometimes referred to as the NOMAD states (“N” for New Hampshire, “O” for Oregon, and so forth).Do you tip in Canada? ›
Gratuities are seldom included in Canadian restaurants. It is customary to tip approximately 15-20% on the total bill before tax, less for poor service, more for truly exceptional service. Many restaurants may charge an automatic 15-18% gratuity for larger groups.Why is Canada so expensive compared to US? ›
LIMITED SUPPLY OF HOUSING, LABOUR. While demand for housing is rising in Canada, supply is struggling to keep up. Canadian housing prices have more than doubled between 2005 and February 2022, growing at least twice as quickly as those of any other G7 nation by the end of 2021.Is Canada more expensive than the US? ›
Overall, Canada is more affordable than the US, but the US has a higher median income. Comparing the cost of living in both countries is tricky because living costs vary dramatically within each city. It's important to consider the hidden costs and savings of public goods and services when comparing costs of living.Is food more expensive in Canada than the US? ›
Yes, in general, food in Canada is more money…but the only thing we bring back worth the effort is liquor…the savings are quite big in that department. Yeah, they're a solid 15-20%+ more expensive than here, in general. We go up regularly, and we just got back from a two-week trip up there a few days ago.Is it worth it to buy a car from USA to Canada? ›
Should you import a car from the U.S.? Financially, the answer is very often – no. The expense and work required to import a vehicle is substantial. However, if you are making a purchase of a vintage car or another vehicle with sentimental value, then keep reading.Can a US citizen own a car in Canada? ›
Yes, they can, but there will be a few legal considerations (registration, license, and insurance), taxes to pay (depending on the province), and import procedures (if you take it to the U.S) to take care of, so tell the dealer your plan and ask about it all before making a purchase.Is it OK to buy a Canadian car in the US? ›
Any vehicle that's 25 years old or more (like the 1979 Dodge Magnum XE) can be imported to the United States from Canada without any special modifications. Newer vehicles can also be imported, but they must be modified to meet federal motor vehicle safety standards.How do I avoid paying taxes on a used car in Canada? ›
Only new luxury vehicles that meet the minimum retail sales price and have not yet been registered will have the tax applied. So long as the tax had been paid at the original date of purchase, luxury tax on a used car will not need to be paid.How much is taxes and fees on a used car in BC? ›
Overview. If you buy a used car in British Columbia, through private sale, expect to pay provincial sales tax (PST). Anywhere between 12 and 20% in PST is due when you register your vehicle, depending on the car's value and how you acquired it. Review the specific details here.
A combination of supply chain issues, material shortages and changing demand have resulted in rising prices and long waits for Canadians hoping to purchase a new or used vehicle.Are taxes higher in BC or Ontario? ›
The provincial tax burden for an individual at the average income level in British Columbia is $2,353, $2,369 in Ontario, and $3,338 in Alberta. By comparison, the provincial tax burden in the Atlantic provinces at this income level ranges from $4,463 in New Brunswick to $5,318 in Nova Scotia.How much higher are taxes in Canada than the US? ›
|Tax Parameter||Canada||United States|
|Federal individual income tax rates||15% to 33%||10% to 37%|
|The lowest individual tax bracket for 2023||$53,359||$11,000|
|Are there state/provincial individual income taxes?||All provinces have a provincial income tax||8 states don't have a state income tax|
Canada is ranked #25 out of 172 countries in the list of highest-taxed countries in the world. While Canada isn't the highest taxed overall, we are within the upper third of the highest-taxed countries in the world.How much is 120k after tax in BC? ›
If you make $120,000 a year living in the region of British Columbia, Canada, you will be taxed $35,713. That means that your net pay will be $84,287 per year, or $7,024 per month. Your average tax rate is 29.8% and your marginal tax rate is 40.7%.What is low income in BC? ›
For a single person or couples without children receiving income assistance: $500.00 a month. For families with children: $750.00 a month. For families with a child with a disability: $900.00 a month.Which city has highest property taxes in BC? ›
Powell River which has the highest property tax rate among places studied also has the lowest average home price.What city in BC has the lowest property taxes? ›
Whistler Has the Lowest Property Tax in BC
Generally speaking, housing costs are higher in the areas with the lowest tax rates. Of the seven regions with the lowest rates on our list, the average price for all homes is over $1,000,000.
In 2020, the average American contributed 8.9% percent of their income in state taxes. Alaska had the lowest average overall tax burden – measured as total individual taxes paid divided by total personal income – at 5.4%, followed by Tennessee (6.3%), New Hampshire (6.4%), Wyoming (6.6%) and Florida (6.7%).How can I save tax in Canada? ›
- Utilize RRSPs, TFSAs, RESPs to the max. ...
- Split your income or pension with your spouse. ...
- Look into your principal residence exemption. ...
- Find the tax credit or deduction for your life situation. ...
- Make a heartfelt donation (and keep the receipt)
Yes, you'll need to pay 13% HST (harmonized sales tax) when you purchase a used vehicle from a used car dealership in Ontario. As a GST/HST registrant, the car dealership needs to charge a 13% sales tax on all of their sales, which is then given to the CRA (Canada Revenue Agency).How much tax do you pay on a vehicle in Ontario? ›
Tax on used vehicles
You do not pay sales tax to the seller. How much: In most cases, buyers pay 13% RST in Ontario. The amount is based on the purchase price or the vehicle's wholesale value, whichever is greater. Appraisals: If the vehicle is 20 years old or older, you will require an appraisal.
Where's the cheapest provincial sales tax?
|Tax||GST + PST|
|Prov. rate (PST /RST /QST)||7% (for vehicle under 55K)|
|Fed rate (GST)||5%|
GST is set at 5% across Canada and you'll pay that on any vehicle—new or used—purchased at any dealership.Do you pay tax on private car sales in BC? ›
Vehicles Purchased at a Private Sale
Effective October 1, 2022, if you purchase a vehicle at a private sale in B.C., you generally must pay PST at the applicable rate on the greater of the average wholesale value or the purchase price of the vehicle, unless a specific exemption applies (see Exemptions below).
You can write off part or all of the purchase price of a new or "new to you" car or truck for your business by taking a section 179 deduction. This special deduction allows you to deduct up to the entire cost of the vehicle in the first year you use it if you are using it primarily for business purposes.How to buy a car in Alberta and bring to Ontario? ›
- You will need to transfer your driver's licence to one issued in Ontario.
- You must purchase an Ontario auto insurance policy for your vehicle. ...
- To register your vehicle in Ontario, you must have proof that you own the vehicle.
The current rates are: 5% (GST) in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan, and Yukon. 13% (HST) in Ontario. 15% (HST) in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.Do you pay tax on private car sales in Ontario? ›
If you purchased the used vehicle from a car dealer, you will be required to pay the provincial-federal Harmonized Sales Tax (HST). If your vehicle was purchased privately, you will not pay the Harmonized Sales Tax (HST), but the Ontario government will still charge you a provincial retail sales tax (RST) of 13%.Do you pay both taxes on a used car in Ontario? ›
How Much Tax do You Pay on a Used Car in Ontario? In Ontario, used car buyers don't pay sales tax to the seller. However, most of the time, used car buyers will pay 13 percent RST. The amount is based on the purchase price or the vehicle's wholesale value (whichever is greater).
You can't gift a car (or transfer ownership) unless you fully own it. So before you can think about gifting your car to a family member, you need to make sure you've paid off any remaining balance on your car loan.