So is that before HST or after?
For the "luxury car tax" in British Columbia, people there are already paying a hefty tax which is might be more than the percentage "larryd" indicated above, since it depends upon the cost of the vehicle. To quote from a May 10, 2019 "Automotive NewsCanada" article (written by Dan Heyman in Vancouver):
On April 1, 2018, B.C.’s NDP government raised the provincial sales tax to 15 per cent from 10 on new and used vehicles priced between $125,000 and $149,999. On vehicles $150,000 and over, the tax increased to 20 per cent from 10. There’s also the five-per-cent federal GST, bringing the total tax bill on a $150,000 car to $37,500, a full 25 per cent. The increase also applied to leased vehicles, including customers already in a contract.
You'll find the full article here:
With a 25 per cent total sales tax, some dealers say they "can barely sell a car between $150,000 and $225,000."
canada.autonews.com
So you're hit with an additional tax in BC when you buy a vehicle priced between $125,000-$149,999 (15%) then for any vehicle costing $150,000 or more, it's 20% (wow!). And from the above quote, I gather the luxury sales tax is likely calculated on the base price and before any other taxes are factored into the calculation, so the extra tax is likely NOT calculated on a price which includes HST. But right now this is
unknown, since the Feds haven't introduced the vehicle tax nor given any details that I could find about how the tax would work. But I'd hope even the Feds wouldn't impose a tax on a tax...
If you want to be safe, order a car that works out to less than $100,000 in total, inclusive of any Provincial taxes, if that's possible. Another idea that might help, would be to have all dealer installed options separately invoiced, to reduce the over-all invoiced price on the vehicle, since these dealer installed options are add-ons that anyone can purchase after the initial vehicle sale.
But be thankful if you're not a BC resident, already facing these taxes. If the Feds tack on another 10%, the BC luxury car dealers are warning their business will really suffer, due to the high BC taxes already imposed on these purchases, as mentioned in this October 2019 article:
B.C. dealers are calling the 10-per-cent tax “very concerning”
driving.ca
So perhaps this is incentive to buy an expensive vehicle before the Feds bring in that tax. With all the COVID spending that's been happening at the Federal and Provincial levels, I suspect luxury vehicle taxes will be popular with governments, since not too many people will be sympathetic to those complaining about extra tax who want to spend $100K+ on a vehicle.
Oh and if you're in BC and hope to avoid paying their luxury vehicle taxes by purchasing a used vehicle privately, think again since the extra taxes apply to private sales as well. All other Provinces except Alberta impose some form of tax on private vehicle sales. You'll see this in this November 2019 article which gives a nice comparison to what the different Provinces currently do:
Thinking about buying a vehicle or upgrading for something better? Learn all about car sales tax across Canada and how you can use it to your advantage!
www.canadadrives.ca
