Covering the ticket price of a vehicle is expensive enough, but there’s also sales tax to consider. The question is, how much is the provincial sales tax on cars in BC? Before going through with a transaction, make sure you find out how much you might pay in sales tax and how it will affect your budget.
Key Points
- The sales tax rate charged on cars in BC depends on the car price range and whether you’re buying from a dealership or a private seller.
- Vehicles bought from a dealership are charged both GST (5%) and PST, which range from a total of 7% to 20%, depending on the car’s value.
- Vehicles bought from a private seller are charged only the PST, which ranges from 12% to 20%, depending on the car’s value.
How Much Is The Sales Tax On Cars In BC?
The amount you’ll pay on sales tax in BC depends on where you buy the vehicle.
- Dealership. If you buy a new or used car from a dealership, you’ll need to pay both a GST (5%) and PST (7% to 20%). The PST amount in BC varies on the car price when you purchase a car from a GST registrant, like a dealership.
- Private Seller. If you buy a vehicle from a private seller, you’ll need to pay PST when you register the car with the Insurance Corporation of British Columbia (ICBC). The PST for a car in BC can range between 12% to 20% when you purchase a car from a private seller.
Sales Tax: Buying A Car From A Dealership vs A Private Seller In BC
| Car Price | Dealership (PST + GST) | Private Seller (PST) |
| Less than $55,000 | 12% (7% PST + 5% GST) | 12% |
| $55,000 – $55,999 | 13% (8% + 5% GST) | 12% |
| $56,000 – $56,999 | 14% (9% + 5% GST) | 12% |
| $57,000 – $124,999 | 15% (10% + 5% GST) | 12% |
| $125,000 – $149,999 | (20%) 15% + 5% GST | 15% |
| $150,000 and over | (25%) 20% + 5% GST | 20% |
Learn more: Taxes On Cars In Canada: Dealership vs. Private Sale
Do You Have To Pay Taxes If You’re Gifted A Car?
If you receive a car as a gift, whether you have to pay taxes on it depends on your relationship with the gift giver and the province you live in. If the person who gave you the vehicle is an immediate family member, then you likely do not have to pay taxes on the vehicle. However, if you are outside of the immediate family, then you may be required to pay Retail Sales Tax (RST) to complete the transfer of ownership.
You’ll need to check with your province’s transportation office to understand whether RST is required.
How Do You Pay Car Sales Tax In BC?
How you pay the PST on your vehicle purchase depends on who you buy it from:
- Dealership Sales: Buying a car from a dealership or online retailer is pretty simple because taxes are applied at the point of sales and paid directly to the dealer.
- Private Sales: Paying taxes on a private sale is a bit more complicated. The PST is only calculated and collected when you register the car with the ICBC. The PST rate is based on the purchase price or the vehicle’s fair market value (usually according to Canadian Black Book values), whichever of the two is greater.
Can You Roll Your Taxes Into Your Car Loan?
Yes, you can roll the sales tax into your auto loan, as long as the lender allows it. Keep in mind, however, that if you don’t pay the sales tax upfront and instead add it to the loan, your loan amount will increase. Not only are you paying interest on the car price, but on the sales tax portion as well.
Are There Any Rebates For Purchasing A Zero-Emission Electric Car In BC?
BC had two programs to help promote zero-emission vehicles, however, both programs are not available at this time.
PST Rebate
In BC, if you buy, lease or are gifted a zero-emission vehicle (ZEV), you’ll be exempted from PST charges. Used ZEVs purchased from a private seller are also eligible for this tax exemption, however, the car must have 6,000 km on it.
Zero-Emission Vehicles (iZEV) Program
If you buy a zero-emission electric vehicle (ZEVs) in BC from a dealership or private seller, you may be eligible for a rebate. The rebate amount you may qualify for depends on your income.
How To Calculate Sales Tax On Cars In BC
To calculate the sales tax on a car purchase in BC, follow these steps:
- Step 1: Determine the purchase price of the car.
- Step 2: Multiply the purchase price by the tax rate to see the amount of tax owed.
- Step 3: Add the tax owed to the car’s purchase price to get the total amount due.
Example:
Assuming you buy a car from a dealership that’s a GST registrant, let’s compare various scenarios of how much sales tax you’ll pay and how to calculate it in each example:
| Car Price Before Sales Tax | Sales Tax | Car Cost After Sales Tax |
| $45,000 | $2,250 (5% GST) + $3,150 (7% PST) = $5,400 | $50,400 ($45,000 + $5,400) |
| $55,000 | $2,750 (5% GST) + $4,440 (8% PST) = $7,190 | $62,190 ($55,000 + $7,190) |
| $56,000 | $2,800 (5% GST) + $5,040 (9% PST) = $7,840 | $63,840 ($56,000 + $7,840) |
| $57,000 | $2,850 (5% GST) + $5,700 (10% PST) = $8,550 | $65,550 ($57,000 + $8,550) |
| $125,000 | $6,250 (5% GST) + $18,750 (15% PST) = $25,000 | $150,000 ($125,000 +$25,000) |
| $150,000 | $7,500 (5% GST) + $30,000 (20% PST) = $37,500 | $187,500 ($150,000 + $37,500) |
How Your Sales Tax Affects Your Car Loan Cost In BC
Since there’s additional interest and fees involved with a car loan, things can get a bit more expensive and complicated when you finance a vehicle in BC. Sales tax can be included in the final price, which would increase the total amount you need to borrow.
For example, if you want to buy a $45,000 car from a dealership in BC, you’ll be charged a 5% GST and a 7% PST. In this case, the total cost of the car would be as follows:
- GST: $2,250
- PST: $3,150
- Total Sales Tax: $5,400
- Total Car Price With Tax: $50,400
So, you’d need to finance $50,400, and not just the $45,000 ticket price.
Let’s illustrate how much your car loan will cost you when sales tax is factored in (assuming no down payment was made):
| Car Price | $45,000 |
| Sales Tax | $5,400 (GST + PST) |
| Total Loan Amount | $50,400 |
| Loan Term | 60 months |
| Interest Rate | 5.9% |
| Monthly Payments | $867.89 |
| Total Interest Paid | $7,073.11 |
Can You Reduce Your Car Sales Tax By Trading In Your Car?
Yes, you can save money on sales tax by trading in your car, as the sales tax is only payable on the difference between the price of the new vehicle and the trade-in price the dealer is willing to offer.
So, for example, let’s say the trade-in value of your current vehicle is $5,000, and the price of the new car you’re buying is $27,000. In this case, the trade-in value of your car would first be deducted from the purchase price of the new car. Then the sales tax would apply:
- New car price: $27,000
- Trade-in value of your existing car: $5,000
- Amount payable (before tax): $22,000
- Total sales tax: $2,640 (GST + GST applied to $22,000)
- Total car cost: $24,640
Instead of paying sales tax on the $27,000 of your new car, your trade-in would allow you to save money in taxes.
Other Costs To Consider
Before you buy a car in BC, make sure to factor in all the other possible costs, such as the following:
- Vehicle Registration – When you buy a car in BC, you’ll also have to register it with the provincial government. The amount you end up paying in registration fees depends on the vehicle’s make, model, weight, and production year.
- Insurance – BC drivers are required to have a minimum amount of third-party liability insurance. While insurance premiums are still based mainly on the make and model of your car, your driving record will be a significant factor here too.
- Dealer Documentation Fees – If you buy a car from a dealership in BC, you’ll normally have to pay to cover the cost of processing all the paperwork involved. Documentation fees vary based on your dealership’s policies and vehicle type, but usually sit at around $595.
Final Thoughts
When buying a car in BC, don’t forget to add up all the taxes and other fees involved in the sale to make sure the total cost fits within your budget. Sales tax, in particular, can add a few extra thousand dollars to the final cost. Be sure to do the math before committing to a purchase.
