In British Columbia the sticker price on an expensive car is not the price. Three separate taxes stack on top of it, in an order that is not obvious, and the total climbs faster than the price does. A $130,000 vehicle costs $163,275 to drive away.
The short answer
- BC PST on a vehicle from a dealer runs from 7% up to 20%, set by price band.
- The federal luxury tax adds the lesser of 10% of the full price or 20% of the amount above $100,000.
- GST then applies on top, and above $125,000 it applies to the PST as well.
- PST is not charged on the luxury tax. That one runs the other way.
- The jump at $125,000 is steep, because two rules change at once.
- A private sale is not automatically cheaper. Under $125,000 it is often dearer.
BC PST: the rate depends on how you buy it
Most people assume one PST rate. There are two entirely different ladders, and which applies depends on whether the seller is a GST registrant. Buying from a dealer, importing, or leasing puts you on the first ladder.
Buying from a dealer, importing or leasing
| Purchase price | PST rate |
|---|---|
| Less than $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 over | 20% |
Buying privately
A private sale, meaning the seller is not a GST registrant, does not use those narrow bands. It carries a flat 12% up to $125,000, then 15% from $125,000 to $149,999.99, and 20% at $150,000 and over.
This surprises people who assume buying privately saves tax. On a $60,000 car a dealer purchase is taxed at 10% and a private purchase at 12%. The private route only stops being more expensive once you reach $125,000, where both ladders converge.
There is a second trap on private purchases. Since 1 October 2022 a private-sale or imported vehicle is valued at the greater of the average wholesale value and the purchase price, so agreeing a low price on paper does not set the tax base.
The federal luxury tax
Above $100,000, a separate federal tax applies. It is the lesser of two calculations: 10% of the full taxable amount, or 20% of the amount above $100,000. The 20% calculation produces the smaller figure until the price reaches $200,000, so in the range most buyers are in, that is the one that applies.
It applies to a subject vehicle, which means one designed primarily to carry people on highways, seating no more than 10, with a gross vehicle weight rating of 3,856 kg or less, manufactured after 2018, and travelling on four or more wheels. Sedans, coupes, SUVs and light-duty pickups are all inside that definition.
Ambulances, hearses, marked police vehicles, marked emergency medical and fire vehicles, and qualifying recreational vehicles are excluded, as is a vehicle registered with a government before September 2022 where possession also passed before that date.
What changed, and what most articles still get wrong
The luxury tax originally covered aircraft and vessels as well as vehicles. Budget 2025 removed it from aircraft and vessels effective 5 November 2025, and the amending legislation received royal assent on 26 March 2026. It still applies to vehicles above $100,000. Anything written before late 2025, which is most of what is online, describes a tax on boats and planes that no longer exists.
The order the taxes stack in
This is the part that decides the final number, and it is counter-intuitive in both directions.
| Question | Answer |
|---|---|
| Is PST charged on the federal luxury tax? | No |
| Is GST charged on the federal luxury tax? | Yes |
| Is GST charged on the PST? | Only where the 15% or 20% PST rate applies |
| Is the luxury tax charged on the PST? | No |
So below $125,000 the GST base is the price plus the luxury tax. At $125,000 and above, the PST rate jumps to 15% and that PST enters the GST base. Two rules change at the same threshold, which is why the total cost rises so sharply at that point.
Two worked examples, from the Province
These are the Province’s own figures, not our arithmetic, taken from the bulletin for motor vehicle dealers.
A $110,000 vehicle from a dealer
| Item | Amount |
|---|---|
| Pre-tax price | $110,000 |
| PST at 10% | $11,000 |
| Federal luxury tax | $2,000 |
| GST at 5% on the price and the luxury tax | $5,600 |
| Total | $128,600 |
Note the PST is not in the GST base here, because the rate is 10%.
A $130,000 vehicle from a dealer
| Item | Amount |
|---|---|
| Pre-tax price | $130,000 |
| PST at 15% | $19,500 |
| Federal luxury tax | $6,000 |
| GST at 5% on the price, the PST and the luxury tax | $7,775 |
| Total | $163,275 |
Twenty thousand dollars more on the sticker costs nearly thirty-five thousand more in total. The tax on the $130,000 car is $33,275 against $18,600 on the $110,000 one, because the PST rate rose by five points and the PST joined the GST base at the same moment.
Electric vehicles
Zero-emission vehicles acquired after 22 February 2022 use the same structure with higher thresholds. The escalating dealer bands start at $75,000 rather than $55,000, so 7% runs to $75,000, then 8% and 9% through narrow bands, and 10% from $77,000 to $124,999.99. Above $125,000 the rates are identical to any other vehicle.
The Province states these ZEV rates are in effect until 22 February 2027, after which they return to the previous rates. If a purchase is near that date, the timing is worth checking rather than assuming.
If the car is going through a business
None of the above is the whole question for an owner-managed business. Whether the vehicle should be owned personally or corporately, what portion of the cost is deductible, the capital cost allowance limits, and the standby charge on personal use all sit on top of it. Those usually matter more to the overall cost than the purchase taxes do.
If you are reimbursing yourself for business kilometres instead, the CRA mileage rates and a calculator are here.
Common questions
How much tax do you pay on a $130,000 car in BC?
Using the Province’s own worked example, a $130,000 vehicle bought from a dealer in Vancouver attracts $19,500 PST at 15%, $6,000 federal luxury tax, and $7,775 GST, for a total of $163,275. The taxes add $33,275 to the sticker price.
What is the BC PST rate on an expensive car?
Buying from a dealer, PST runs 7% under $55,000, then 8%, 9% and 10% through narrow bands, 10% from $57,000 to $124,999.99, 15% from $125,000 to $149,999.99, and 20% at $150,000 and over.
When does the federal luxury tax apply?
Above a $100,000 price threshold on a subject vehicle. The tax is the lesser of 10% of the full taxable amount, or 20% of the amount above $100,000. In practice the 20% calculation is lower until the price reaches $200,000.
Does the luxury tax still apply to boats and aircraft?
Not since 5 November 2025. Budget 2025 removed the luxury tax on subject aircraft and vessels, and the amending legislation received royal assent on 26 March 2026. It continues to apply to vehicles above $100,000. A great deal of published material still says otherwise.
Is PST charged on the luxury tax?
No. The Province states plainly that the federal luxury tax is not included in the purchase price for the purpose of calculating PST. The stacking runs the other way.
Is GST charged on the PST?
Usually no, but on an expensive vehicle yes. Where the 15% or 20% PST rate applies, the PST amount is included in the consideration for calculating GST. Below those rates it is not. That single rule is why the tax jumps sharply at $125,000.
Is a private sale cheaper?
The rates are structured differently. A private sale carries a flat 12% up to $125,000 rather than the 7% to 10% dealer bands, so a private purchase under about $125,000 is often taxed more heavily, not less. Above $125,000 both routes reach 15% and then 20%.
Do electric vehicles get different rates?
Zero-emission vehicles have higher thresholds before the escalating dealer bands begin, starting at $75,000 rather than $55,000. The Province states these ZEV rates are in effect until 22 February 2027, after which they return to the previous rates.
Does a cheap private purchase price reduce the PST?
Not necessarily. Since 1 October 2022 private-sale and imported vehicles are valued at the greater of the average wholesale value and the purchase price, so a low stated price does not automatically set the tax base.
Buying through a business
The purchase taxes are the visible part. Ownership structure, deductibility, capital cost allowance and the standby charge usually decide the real cost, and they are worth settling before the purchase rather than at year end. Offices in Abbotsford, Langley and Brampton.
Sources: Province of B.C., Bulletin PST 308, PST on Vehicles (revised March 2025), Bulletin PST 116, Motor Vehicle Dealers and Leasing Companies (revised April 2026, source of both worked examples), CRA Notice LTN2, Subject vehicles under the Select Luxury Items Tax Act, CRA Notice LTN5 (April 2026) and CRA, Consideration and retail value. Checked 12 August 2026. General information only, not advice for your situation, and rates on a purchase of this size are worth confirming on the day.