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Car Sales Tax in BC for Used Cars: What You Need to Know

Buying a used car in British Columbia? Learn how car sales tax works in BC, when you pay it, and smart tips to reduce your tax bill—whether you’re buying from a dealership or private seller.

Buying a car is one of those big milestones that can feel like a win — until you see the final bill. Like hidden waves beneath a calm surface, taxes and fees can quietly swell the price you thought you were paying. And in British Columbia, understanding how used car sales tax works can be the difference between smooth sailing and sticker shock.

Whether you’re picking up a used car from a dealership in Vancouver or buying one privately from a seller in Kamloops, knowing how much tax you’ll owe — and when you’ll have to pay it — can help you plan better and avoid surprises.

In this guide, we’ll break down how car tax in BC works for used vehicles, how it’s calculated, who’s exempt, and how to legally minimize the amount you pay.

What Is Car Sales Tax in BC?

In British Columbia, car sales tax isn’t a flat rate like the HST in Ontario — it varies based on the type of vehicle, purchase price, and whether you’re buying from a dealership or a private seller.

Here’s how it works:

  • When buying from a dealership, you’ll pay Provincial Sales Tax (PST) at a rate of 7%, plus Goods and Services Tax (GST) at 5% — for a combined 12% tax.
  • When buying from a private seller, you pay PST only, and the rate depends on the vehicle’s fair market value.

For used vehicles purchased privately, the PST rate is based on the purchase price or Canadian Black Book wholesale value, whichever is higher.

BC PST Rates for Private Used Vehicle Purchases:

  • Up to $124,999: 12%
  • $125,000–$149,999: 15%
  • $150,000 or more: 20%

This tiered structure is one of the key differences compared to provinces like Ontario, where the tax remains a fixed percentage regardless of the vehicle’s value. In BC, the more expensive the car, the more tax you’ll pay.

When Do You Pay Sales Tax on a Vehicle in BC?

Whether you’re buying from a dealership or a private seller in BC, the sales tax must be paid — but how and when you pay it depends on the seller type.

Buying from a Dealership

When purchasing a used car from a licensed dealership in British Columbia:

  • The 12% tax (7% PST + 5% GST) is automatically included in your bill of sale.
  • You don’t need to pay anything extra to the government when registering the car — the dealer handles it.
  • Dealerships often offer additional perks like warranties, certified inspections, financing, and return policies.

If you’re shopping online, platforms like Clutch make it easy by breaking down all taxes and fees into the transparent price you see at checkout, so there are no surprises.

Buying from a Private Seller

When buying a used car privately:

  • You only pay PST, not GST.
  • The PST is calculated based on the greater of the purchase price or the Canadian Black Book wholesale value.
  • The tax is collected by ICBC (Insurance Corporation of British Columbia) when you register and insure the vehicle — not during the actual transaction with the seller.

This is important: If you get a “deal” on a car and pay less than its market value, ICBC may still assess tax based on the higher wholesale valuation. Always check that in advance so you can budget accordingly.

Exemptions and Special Cases in BC

Not every vehicle transaction in British Columbia triggers sales tax. In some cases, you can transfer ownership without paying PST — but only if your situation meets certain criteria. Here are the most common exemptions:

1. Gifted Vehicles Between Family Members

If you’re receiving a vehicle as a genuine gift from an immediate family member, you may be exempt from PST. Eligible relationships include:

  • Spouse or common-law partner
  • Parent or step-parent
  • Child or step-child
  • Grandparent or grandchild
  • Sibling (including step- or half-siblings)

You’ll need to provide documentation, such as a Transfer/Tax Form (APV9T) and a gift letter signed by both parties.

2. Inheritance Transfers

If you inherit a vehicle due to a death in the family, you may also be exempt from PST. You’ll need to show proof, like a will or death certificate, and complete the proper transfer forms when registering the vehicle.

3. Indigenous Exemptions

If the buyer is a status First Nations person and the sale and delivery of the vehicle occurs on reserve land, the transaction may qualify for a PST exemption. Proper documentation is required to validate this exemption.

4. Other Exemptions

  • Transfer between companies under common ownership
  • Change in ownership due to divorce or separation
  • Vehicle returned under a cooling-off period

Always check with ICBC or a Service BC agent to confirm your exemption eligibility and required documentation before completing your transaction.

Tax Savings When Trading in a Vehicle

Trading in your current vehicle when purchasing another can lead to significant tax savings in BC — but only when buying from a dealership.

Here’s how it works:

  • The trade-in value is deducted from the price of the new or used vehicle you’re buying.
  • You only pay PST (7%) on the difference, not the full price.

Example:

  • Price of vehicle you’re buying: $30,000
  • Value of your trade-in: $10,000
  • Taxable amount: $20,000
  • PST (7%): $1,400

This is a major advantage over selling your vehicle privately, where the full PST will apply on your next purchase.

When you sell or trade in with Clutch, we give you a competitive offer for your vehicle — and if you choose to trade in, the tax savings can help lower your monthly payments even more.

How is Sales Tax Calculated?

In BC, sales tax on used vehicles depends on where you buy the car and how much you pay. The tax breakdown is as follows:

Buying from a Private Seller:

  • You’ll pay 7% Provincial Sales Tax (PST) at the time of registration with ICBC.
  • The tax is calculated on the greater of the purchase price or the vehicle’s average wholesale value, as determined by ICBC (usually using Canadian Black Book values).

Example:

  • You buy a used car privately for $8,000
  • ICBC values it at $10,000
  • You pay 7% PST on $10,000 = $700 in tax

Even if you scored a great deal, you may still owe tax based on ICBC’s valuation — not what you actually paid.

Buying from a Dealership:

  • You’ll pay 12% total tax (5% GST + 7% PST) at checkout, applied to:
  • The car’s base price
  • Any dealer fees (e.g. documentation or admin fees)
  • Optional add-ons (e.g. extended warranties, accessories)

Note: If the vehicle’s purchase price exceeds $55,000, a luxury surtax may apply on the PST portion:

  • $55,000–$55,999.99 → 8% PST
  • $56,000–$56,999.99 → 9% PST
  • $57,000+ → 10% PST

Using a tool like Clutch’s Car Loan Calculator can help estimate your full cost — including taxes — so there are no surprises.

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Skip the Guesswork — Shop Smarter With Clutch

Navigating car sales tax in BC doesn’t have to be confusing. Whether you’re buying from a dealer or a private seller, understanding how the tax works—and how to minimize it—can help you make smarter, more affordable decisions.

At Clutch, we make the process even easier. All our prices are transparent, with no hidden fees or surprise taxes at checkout. Plus, we take care of the registration paperwork for you, so you don’t have to deal with ICBC yourself. Looking to trade in your vehicle? We’ll give you a competitive offer and apply the value directly to your next purchase, helping you save on PST.

Our 100% online car buying experience means you can browse, finance, and schedule delivery without ever setting foot in a dealership. Every vehicle comes with a 210-point inspection, a 3-month or 6,000-km warranty, and a 10-day money-back guarantee for total peace of mind.

Skip the dealership hassle and shop confidently with Clutch.

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About The Author

Ben Steffler

Ben Steffler is a Senior Growth Manager at Clutch, bringing over seven years of experience in the automotive industry. Passionate about making car buying and selling easier for Canadians, he combines market insights with engaging storytelling to help consumers make informed decisions.

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