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VICTORIA, B.C. — ICBC implemented a tax change on October 1st after being announced earlier this year, which could raise the cost of used cars in B.C.
As of October 1st, instead of calculating the PST using the sale price, the province says taxes will be based on the vehicle’s wholesale value to prevent tax evasion.
“The PST has been payable on privately purchased new or used vehicles since 2012. The change brings us into line with what most other provinces are already doing,” said Ministry of Finance Selina Robinson.
“It does not apply to trade-ins, and it’s good to remember the average wholesale value of a vehicle is lower than its estimated market value.”
The average wholesale value of the motor vehicle will be determined using the Canadian Black Book valuation guide, according to the province.
If the average wholesale value of the vehicle is higher than the purchase price, the average wholesale value will be used to calculate PST.
A purchaser can present ICBC with a completed Motor Vehicle Appraisal Form. If the appraised value and the purchase price are less than the average wholesale value of the vehicle, the price used to calculate PST will be the higher amount between the purchase price and the appraised value.
“We expect very few vehicles to be sold below the average wholesale price, but if people paid less than the average wholesale value due to the condition of the vehicle, they will be able to obtain an appraisal of the vehicle to lower the tax payable on the purchase,” said Robinson.
“Our government has taken significant steps to reduce costs for drivers, including fixing ICBC and lowering car insurance rates.”
Peace River North MLA Dan Davies is opposed to the recent change.
“This is a decision that will directly target low and middle-income British Columbians collecting this used car tax,” Davies said.
“It’s just absolutely an unfair tax grab at a time when people are already struggling.”
He believes the majority of British Columbians are buying used cars and calls this change “backwards and unfair.”
Though drivers can appeal the amount through a process, he says they would have to hire an independent appraiser at $300 to $400.
“Who’s gonna do that?” Davies asked.
“It’s an absolute unfair tax grab that targets most British Columbians in that middle-income bracket and low-income bracket; the ones that are already struggling, that are already over their head rights now because of the cost of living. This is just one more kick in the teeth.”
The PST is collected by ICBC when the vehicle is registered.
More information on this announcement and implementation can be found below:
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