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Explain the sales tax on vehicle purchases in YT?
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Explain the sales tax on vehicle purchases in YT?

In Yukon (YT), the sales tax applied to vehicle purchases is exclusively the federal Goods and Services Tax (GST), levied at a rate of 5%. Unlike many other Canadian provinces, Yukon does not impose its own provincial sales tax (PST) or participate in the Harmonized Sales Tax (HST) system, making its sales tax structure for vehicles relatively straightforward. This 5% GST applies to both brand-new vehicles and used vehicles purchased from a GST-registered dealership.

A crucial point for consumers to understand is that if you purchase a used vehicle in a private sale from an individual, GST typically does not apply, which can represent a significant saving compared to buying from a dealer. This distinction is vital because the sales tax directly adds to the total purchase price of the vehicle, increasing the upfront cost and, consequently, the total amount that needs to be financed. For instance, on a $30,000 vehicle, the 5% GST adds $1,500 to the final price. This relatively lower sales tax burden, compared to provinces with HST rates of 13% or 15%, or those with PST stacked on top of GST, makes vehicle purchases in Yukon more tax-efficient from a sales tax perspective, directly impacting a consumer's budget and affordability calculations.

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Related Topics: province taxes yt

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