Understanding car sales taxes in Canada is essential whether you’re buying a new or used vehicle. Sales taxes vary significantly across provinces and territories, and the tax implications differ between purchasing from a private seller and a dealership. This guide provides a comprehensive overview of car sales taxes across Canada, including a detailed table and answers to specific tax-related questions.
Sales Tax Breakdown by Province
Here’s a breakdown of the sales tax rates across Canada for new and used cars, including provincial and federal taxes.
| Province | Tax | Prov. Rate (%) | Fed Rate (GST) (%) | Total (HST) (%) |
|---|---|---|---|---|
| Alberta | GST | 0 | 5 | 5 |
| British Columbia | PST + GST | 7 | 5 | 12 |
| Manitoba | PST + GST | 7 | 5 | 12 |
| New Brunswick | HST | 10 | 5 | 15 |
| Newfoundland and Labrador | HST | 10 | 5 | 15 |
| Northwest Territories | GST | 0 | 5 | 5 |
| Nova Scotia | HST | 10 | 5 | 15 |
| Nunavut | GST | 0 | 5 | 5 |
| Ontario | HST | 8 | 5 | 13 |
| Prince Edward Island | HST | 10 | 5 | 15 |
| Quebec | QST + GST | 9.975 | 5 | 14.975 |
| Saskatchewan | PST + GST | 6 | 5 | 11 |
| Yukon | GST | 0 | 5 | 5 |
Private Seller vs. Dealership
When buying a car from a private seller, you typically pay only the provincial tax. However, purchasing from a dealership involves both federal (GST) and provincial sales taxes (or HST in applicable provinces).
Provincial Tax Details
How Much Tax Do You Pay on a Used Car in Quebec?
In Quebec, used car buyers pay the Quebec Sales Tax (QST) at 9.975% and the federal GST at 5%. For private sales, only QST applies.
How Much Tax Do You Pay on a Used Car in Alberta?
Alberta does not have a provincial sales tax, so you only pay the federal GST of 5% on used cars, whether purchased privately or through a dealership.
How Much Tax Do You Pay on a Used Car in Saskatchewan?
In Saskatchewan, the combined PST and GST is 11% (6% PST and 5% GST). For private sales, only the PST of 6% applies.
How Much Tax Do You Pay on a Used Car in Manitoba?
In Manitoba, the combined PST and GST is 12% (7% PST and 5% GST). For private sales, only the PST of 7% applies.
How Much Tax Do You Pay on a Used Car in New Brunswick, Prince Edward Island, Nova Scotia, and Newfoundland and Labrador?
These provinces apply the Harmonized Sales Tax (HST) at 15% for both new and used cars, regardless of whether the purchase is from a private seller or a dealership.
How Much Tax Do You Pay on a Used Car in Yukon, Northwest Territories, and Nunavut?
These territories do not have a territorial sales tax, so only the federal GST of 5% applies to used car purchases, whether from a private seller or a dealership.
How Much Tax Do You Pay on a Used Car in British Columbia?
In British Columbia, the combined PST and GST is 12% (7% PST and 5% GST). For private sales, the PST of 12% applies.
Federal Luxury Tax
The Federal Luxury Tax applies to new vehicles priced above a certain threshold. As of the current regulations, this tax affects cars priced over $100,000. The luxury tax rate is 10% of the vehicle’s total value above the threshold.
Trade-In Tax Savings Advantage
When you trade in a vehicle at a dealership, the trade-in value is subtracted from the purchase price of the new car, reducing the amount of tax you need to pay. Here’s how it works in Alberta and British Columbia:
Alberta Example
- New Car Price: $30,000
- Trade-In Value: $10,000
- Taxable Amount: $20,000
- GST (5%): $1,000
British Columbia Example
- New Car Price: $30,000
- Trade-In Value: $10,000
- Taxable Amount: $20,000
- PST (7%) + GST (5%): $2,400
Summary
Understanding car sales taxes in Canada involves knowing both provincial and federal tax rates, and how they apply differently to private sales and dealership purchases. By considering the tax implications and trade-in advantages, you can make more informed decisions when buying a car.
Note: Always check the latest provincial and federal tax regulations or consult with a tax professional to ensure compliance.