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

In British Columbia, vehicle purchases are subject to a combination of federal and provincial sales taxes. The federal Goods and Services Tax (GST) is applied at a rate of 5% on all new vehicles and used vehicles sold by GST-registered dealers. In addition to the GST, the provincial Sales Tax (PST) is levied at a base rate of 7% on new vehicles and used vehicles purchased from a dealer. A critical provincial nuance in BC is that PST also applies to used vehicles purchased from private sellers, calculated on the greater of the purchase price or the vehicle's wholesale value as determined by the Canadian Red Book.

Furthermore, BC implements a tiered PST for higher-value vehicles, acting as a provincial luxury tax. Vehicles priced between $55,000 and $56,999 are subject to an 8% PST, while those valued at $57,000 and above incur a 10% PST. It's important to note that the PST calculation can be reduced by the value of a trade-in vehicle, but federal and provincial Zero-Emission Vehicle (ZEV) rebates are purchase incentives that do not directly reduce the taxable amount of the vehicle itself.

Understanding these specific tax structures is paramount for consumers, as these taxes represent a substantial portion of the total vehicle acquisition cost, significantly impacting budgeting, financing, and overall affordability. Prospective buyers in BC must carefully factor these provincial and federal taxes into their financial planning to avoid unexpected expenses and accurately assess the true cost of their vehicle purchase.