Forget about a return to the seven-per-cent tax that used to apply on the private sale of used cars in B.C. before the HST took effect in 2010.
The province has decided to keep the current 12-per-cent tax rate on those transactions when the HST disappears on April 1.
So buyers expecting to pay just $700 in taxes on the private purchase of a $10,000 used car after April 1 will instead face the same $1,200 tax bill on that car that they face today.
The move eliminates a differential that used to exist between private used car sales and used car sales by licensed dealers.
Before the HST, private sales were only subject to the seven-per-cent provincial sales tax, but dealer sales were taxed at 12 per cent, which included the PST and the five-per-cent GST.
B.C. Finance Minister Mike de Jong said the province wants to level the playing field for all used car sales, whether they are private transactions or take place at a dealership.
“Continuing the 12-per-cent tax on private vehicle sales not only levels the playing field with dealerships, it brings in valuable revenue to help balance the budget and provide the programs and services British Columbians rely on,” he said in a statement.
The NDP has estimated the province would lose about $45 million in annual revenue if the tax on private used car sales was lowered back to seven per cent.
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