BC NDP Government Doubles Surtax on Luxury Vehicles

The CBC has reported that the B.C. NDP Government that is currently in power will be doubling the surtax on luxury cars in its 2018 budget. The change will boost provincial sales tax (PST) on cars priced $125,000 and higher beginning on April 1^st, 2018. Buyers of vehicles priced between $125,000 and $149,000 will now pay 15 percent PST (up from 10 percent) while vehicles that cost $150,000 and higher will now pay 20 percent PST, doubling the previous 10 percent. With the 5 percent PST added in, the total taxation amounts to 25 percent and to quote the CBC report “a person buying a $300,000 vehicle would pay $75,000 in taxes.” This increase has undoubtedly raised concern with car dealerships as the worry now will be that buyers of high-end vehicles that fit this price bracket will look to other Provinces to make such purchases which would indicate huge change as DesRosiers Automotive Consultants say that one-third of the cars sold in B.C .are luxury models. According to the same CBC report, luxury car sales in the province have surged over the past decade with nearly 35,500 luxury vehicles being purchased in B.C. las year alone, which is a 9 percent increase from 2016. Luxury vehicles are commonplace in Metro Vancouver as evidenced by a past CBC report stating that the area boasts the highest number of luxury vehicles per capita in all of North America, so it will be interesting to see what repercussions this will have if any. As for what the government is planning to do with the extra money, they are on record as saying that the tax increase will be used to help “pay for better services for British Columbians.”