B.C. to change sales tax on used cars, 'adding insult to injury,' says critic

B.C. critics slam new rules for selling used cars The B.C. NDP says it's targeting fraudsters who devalue their cars to save on taxes, but critics say it will hurt regular private sellers.

Shopping for a used car in B.C. could become more expensive come Oct. 1. That's when the province plans to change how much provincial sales tax (PST) will be applied to used vehicles.

“You will have to pay a value that the government will deem that the car is worth,” said Peter Milobar, the Kamloops-North Thompson MLA and Liberal finance critic.

“If you want to challenge that, you’ll have to pay a mechanic to do some sort of appraisal or mechanical justification as to why the vehicle is worth less," he said.

Currently, the province calculates how much PST you pay on a vehicle by what the seller and purchaser declares as the sale price. The province says these changes are to prevent fraud.

Milobar says these changes are unfair to British Columbians.

“The premise of this is that it doesn’t seem to matter how good of a deal you might be able to get, it means the government wants whatever they feel the value is,” he said.

The provincial government says it will close a loophole that brings a $30-million shortfall each year.

As an example, if a vehicle listed for $17,000 sells for $15,000, the provincial sales tax on that purchase would be $1,050. But if the province deems the actual value of the vehicle to be $17,000, the PST bill would be $1,190.

“Folks who are shopping used don’t have extra money,” said Kris Sims, B.C. director of the Canadian Taxpayers Federation. “They are trying to save money.”

Sims said this change in policy will hurt low-income earners.

“This province is unaffordable for average working people and this is just adding insult to injury."

More details about the change are expected to be available in the fall.