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What is the sales tax on vehicle purchases in AB in Canada?
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Car Loan Glossary • ab

What is the sales tax on vehicle purchases in AB in Canada?

In Alberta, the sales tax on vehicle purchases is exclusively the 5% Goods and Services Tax (GST). This is a federal tax applied uniformly across Canada, but Alberta stands out as one of the few provinces that does not levy its own provincial sales tax (PST) or a harmonized sales tax (HST) on top of the GST. This means that when you purchase a vehicle in Alberta, whether new or used, from a GST-registered dealership, you will only pay the 5% GST on the purchase price.

A crucial distinction for consumers is that GST typically does not apply to private sales of used vehicles between individuals in Alberta, provided the seller is not a GST-registered business. This can represent a significant saving for buyers considering a pre-owned vehicle from a non-commercial seller. Understanding this difference is vital for budgeting, as the 5% GST can add thousands of dollars to the total cost of a vehicle, making Alberta generally a more tax-advantageous province for vehicle acquisition compared to those with higher combined sales tax rates. Always confirm the GST registration status of the seller and the final price to ensure accurate financial planning.

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