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

In Manitoba, the sales tax on vehicle purchases is a combined 12%, consisting of a 5% federal Goods and Services Tax (GST) and a 7% Provincial Sales Tax (PST). This 12% total applies to both new and used vehicles purchased from a licensed dealer. The GST component is a Canada-wide federal tax, while the PST is specific to Manitoba.

For private sales between individuals, the 7% PST is still applicable and is typically collected by Manitoba Public Insurance (MPI) when the vehicle is registered. In such private transactions, GST generally does not apply. It is important for consumers to note that for used vehicles, particularly in private sales, the PST is usually calculated on the higher of the declared purchase price or the vehicle's wholesale value as determined by industry standard guides, a measure designed to prevent tax evasion through under-reporting.

Understanding this tax structure is crucial for accurate financial planning, as the sales tax significantly impacts the total cost of a vehicle. This directly affects the amount to be financed, potential down payment requirements, and subsequent monthly loan payments, often adding thousands of dollars to the overall purchase price. While various federal or provincial rebates for specific vehicle types, such as electric vehicles, may be available, these are typically grants that reduce the net cost rather than altering the sales tax rate itself.