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Explain the sales tax on vehicle purchases in AB?
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Car Loan Glossary • ab

Explain the sales tax on vehicle purchases in AB?

In Alberta, the sales tax on vehicle purchases is exclusively the 5% Goods and Services Tax (GST), a federal tax applicable across Canada. Unlike most other Canadian provinces, Alberta does not levy a provincial sales tax (PST) or a harmonized sales tax (HST) on vehicle transactions. This 5% GST applies uniformly to both new and used vehicles purchased from licensed dealerships. A significant advantage for consumers in Alberta is that private sales of used vehicles are exempt from GST, meaning no sales tax is collected or remitted on these transactions.

This unique tax structure makes Alberta one of the most cost-effective provinces in Canada for purchasing a vehicle, as buyers avoid the additional provincial taxes that can range from 6% to 10% or more in other jurisdictions. For consumers, understanding this means a lower overall purchase price and a more predictable budgeting process, especially when comparing vehicle costs across provinces. This consistent 5% GST rate, without any provincial surcharges, provides a clear financial benefit whether you're buying a brand-new car or a pre-owned model from a private seller.

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