Opinion: Want to buy a car tax-free in BC? Here's how
Jim Csek is chief operating officer and video host at NowMedia. He is also a trained accountant.
Contributions published by KelownaNow reflect only the opinions of those who write them, and not necessarily those of KelownaNow or its staff.
Buying a car in BC comes with huge disadvantages when compared to our Albertan neighbours and is way more complicated, way more.
Alberta has no PST, so right out of the gate there is a huge advantage for both used and new purchases in Alberta, whether you buy privately or from a dealer.
In BC there is the GST and a graduated PST, and the PST tax is also on used cars that are not EVs.
BC applies a tiered PST rate on passenger vehicles based on their purchase price that applies to new and used:
Up to $55,000: 7%
$55,000 to $55,999.99: 8%
$56,000 to $56,999.99: 9%
$57,000 to $124,999.99: 10%
$125,000 to $149,999.99: 15%
$150,000 and above: 20%
And when you break the $100,000 mark, there is a federal luxury tax that gets added to the new vehicle cost. It's important to note that the federal luxury tax is applied first, followed by PST and GST. The PST is calculated on the vehicle price alone, while the GST is calculated on the vehicle price plus the federal luxury tax.
This table provides a detailed breakdown of taxes paid on various vehicle types in British Columbia (BC) versus Alberta (AB), as well as the difference in tax costs between gas-powered and electric vehicles.
Why a used Tesla Model Y Performance is the ultimate no-tax deal in BC
When it comes to getting the best bang for your buck in British Columbia’s vehicle market, buying a used Tesla Model Y Performance (or any EV for that matter) through a private sale is a game-changer. For performance car enthusiasts and budget-conscious buyers alike, a used Model Y offers an ideal combination of high-performance features, cutting-edge technology, and a sleek design, all while skirting a significant tax burden. Let’s explore why this option is better, faster, cheaper, and best of all—tax-free.
IMPORTANT: Keep in mind that all used EVs bought privately in BC have zero tax. You need to let the agents know when you are registering the vehicle as they are typically unaware and will charge you the PST unless you speak up.
Why take advantage of the used EV tax break and at the same time get the best-selling car in the world is answered below.
Better car, unmatched performance
The Tesla Model Y Performance model is widely known for its powerful specs, offering:
Dual-Motor AWD: With all-wheel drive, you get better handling and traction, making the Model Y suitable for any BC weather conditions.
Acceleration: This model rockets from 0 to 60 mph in just 3.5 seconds, rivalling the acceleration of high-end sports cars.
Advanced Features: From Tesla’s advanced autopilot capabilities to over-the-air software updates, a used Model Y Performance is packed with tech that keeps it on the cutting edge.
A new Model Y Performance in BC comes with a hefty price tag, partly due to provincial sales tax (PST) and federal GST on top of the retail price. But a used Model Y Performance through a private sale allows you to enjoy the same performance features and cutting-edge technology at a fraction of the cost due to being used and zero tax if bought in a private sale.
The real kicker in BC’s private used car market is that if you buy from a private seller, you can escape PST and GST, which are added on new vehicles and the GST on used vehicles from a dealership.
And since the car is used, it will likely already have depreciated from the original price, which means you’re not only saving on taxes but also buying at a lower base price.
In the above real world example, I recently purchased a used 2022 Model Y Performance that still has factory warranty and less than 50,000 km on it for $50,000, way less than the just-under $75,000 for a new one from Tesla.
If you do want a new Tesla Model Y, right now Tesla has an offer of 0% financing if you buy full self-drive. You can use this code to get an additional $1,300 off (https://ts.la/jim81632 )
Final thoughts
Purchasing a used Tesla Model Y Performance through a private sale in British Columbia is the savvy buyer’s answer to getting a high-performance, luxury EV without the tax hit. By avoiding the PST on a used private sale, you’re unlocking a unique opportunity to enjoy the perks of a high-powered EV without the typical financial setbacks.
With better performance, unbeatable savings, and zero tax costs, this route offers everything a performance-minded, budget-conscious buyer could ask for. So, if you’re in the market for a luxury electric vehicle that goes above and beyond without breaking the bank, a used Model Y Performance is the clear choice.
I have been driving Teslas for two years now, driving to Vancouver and Calgary many times and in the winter and summer.
They truly are Cheaper, Better, Safer and Faster. A tough combination to beat.
Are they for everyone? No. But are they worth the exploration? Yes!
Lastly, all used EVs in BC are eligible for the zero tax and the only tax on used on on dealer lots is 5% and many times dealers do really offer better deals when compared to private sales and offer you a stress-free transaction.
IMPORTANT: If you do a private deal, you are taking on more risk, you need to do a lien check; this is so important. You also need to do a vehicle history check. You can do this with CarFax or you can do a lien check at BC Registry office for a small fee and an ICBC vehicle history check for a small fee.
Using a dealer, they do all that work and you have someone to go back to.
CAUTION: When the price of a used car is significantly cheaper than others that are similar, they are likely either rebuilds or have had accidents.
In addition:
Check out my recent interview with Blair Qualey, the president of the New Car Dealers Association (NCDA) in BC:
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