BC Luxury Car Buyers To Pay More Sales Tax

This April, luxury car buyers in British Columbia will be on the hook for higher sales taxes.

According to the CBC, changes included in the NDP government's latest budget is a measure that boosts provincial sales tax (PST) on cars priced from $125,000 and higher. The new tax rates go into effect April 1.

Buyers of vehicles with MSRPs between $125,000 and $149,000 will pay 15 percent PST, while cars priced at $150,000 and higher will come with a 20 percent PST hit. Right now, B.C. car buyers pay seven percent PST on vehicles priced below $55,000. That rises to eight percent for vehicles priced between $55,000 and $55,999, to nine percent on a price of $56,000 to $56,999 and 10 percent for vehicles priced more than $57,000. 

All vehicle buyers are also subject to the national five percent goods and services tax (GST).

Car dealers in that province are concerned about the effect the new tax will have on their business. DesRosiers Automotive Consultants says that one-third of the cars sold in B.C. are luxury models.

Blair Qualey, head of the New Car Dealers Association of BC, said his member dealers are worried the tax will drive buyers of high-end cars to dealers in other provinces.

"The automotive sector is incredibly competitive. Where a consumer can go to another jurisdiction to save money, they will," Qualey said. "Our members who sell in the market are gravely concerned."

Mark Edmonds, general manager of a Ferrari-Maserati dealer on Vancouver's Burrard Street, called it a "psychological thing. Twenty-five is a big number. Maybe (people will) buy a boat instead of a car, or ... a vacation property."

The B.C. government said the tax increase is aimed at helping to "pay for better services for British Columbians."