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What is the sales tax on vehicle purchases in ON?
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What is the sales tax on vehicle purchases in ON?

In Ontario, the sales tax on vehicle purchases is generally 13% Harmonized Sales Tax (HST). This rate applies to all new vehicles, as well as used vehicles purchased from registered dealerships. A crucial provincial nuance arises when purchasing a used vehicle directly from a private seller: in these instances, HST is not charged. Instead, the provincial Retail Sales Tax (RST), also at a rate of 13%, is applied to the purchase price or the vehicle's wholesale value, whichever is greater, and is collected by ServiceOntario upon vehicle registration. Understanding this distinction is paramount for consumers, as the sales tax represents a significant portion of the total vehicle cost, directly impacting budgeting and the overall amount to be financed. Furthermore, it's important to investigate potential federal or provincial rebates, such as those for eligible electric vehicles, as these incentives can reduce the effective purchase price, thereby influencing the final tax calculation. Always confirm the precise tax implications and any available programs with your dealership or ServiceOntario to ensure accurate financial planning.

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