Luxury car tax in BC: the 15% and 20% rates

What the luxury bands are

In British Columbia, luxury car tax is just a higher PST rate on a passenger vehicle once its taxable value reaches a set dollar line. There is no extra federal luxury tax on top of this for a typical used-car purchase in BC.

For a private-sale passenger vehicle the rates are: 12% under $125,000; 15% from $125,000 to $149,999.99; and 20% at $150,000 and above. The 15% and 20% steps are the luxury bands people mean when they say luxury car tax.

The rate applies to the full taxable value, not only the dollars above the line. If the value used for tax is $150,000, PST is 20% of that whole amount, not 12% on the first part and 20% on the rest.

Private sale vs dealer sale

Who you buy from changes the tax mix, but the luxury bands themselves stay the same.

Private sale: you pay PST only. There is no GST. Under $125,000 the rate is 12%. From $125,000 to $149,999.99 it is 15%. At $150,000 and above it is 20%. You pay this when you register and insure the vehicle at an Autoplan broker.

Dealer or GST-registrant sale: you pay 5% GST plus PST. PST starts at 7% under $55,000, then 8%, 9%, and 10% through the $55,000 to $124,999.99 range. The luxury bands are still 15% from $125,000 to $149,999.99 and 20% at $150,000 and above.

Because GST is added on a dealer sale, the total tax can be higher than a private sale at the same value. The luxury PST rate does not change that GST rule.

A deal can still hit the luxury band: greater of price or book

For private sales, and for vehicles imported into BC on or after October 1, 2022, PST is charged on the greater of your purchase price or the vehicle's Canadian Black Book average wholesale value.

That means a low bill of sale does not always keep you in the 12% band. If you pay under $125,000 but Black Book average wholesale is $125,000 or more, ICBC can still use the book figure and charge 15% or 20% on that higher number.

The province uses this greater-of rule so people cannot write a fake low price on a bill of sale. The catch is that book value is an average. It does not know about high kilometres, unrepaired damage, or a rebuilt title on your specific car.

FIN-320 if the car is worth less than book

If the car is genuinely worth less than its Black Book average, the Government of BC form that ICBC accepts is the FIN-320 Motor Vehicle Appraisal. A qualified appraiser records the car's real condition and a fair market value. You take that form to your Autoplan broker, and PST is assessed on the appraised amount instead of book.

On a luxury-band car this can matter twice. A lower appraised value can cut the dollars you are taxed on, and it can also move you down a band — for example from 20% to 15%, or from 15% back to 12% — if the true value sits under the next threshold.

The form only helps when the car is actually worth less than book. If your price is already at or above book, there is nothing for the appraisal to correct.

How this differs from everyday 12% used-car tax

Most used cars bought privately in BC stay under $125,000 and pay 12% PST. That everyday rate, the Black Book rule, and the FIN-320 path are covered in the used-car tax guide at /used-car-tax-bc-guide/.

This page is only about the two higher bands: 15% and 20%. The same greater-of-price-or-book rule applies. The same FIN-320 form can lower the value used for tax if the car is worth less than book. The difference is the rate, and the fact that book value alone can push a private deal into a luxury band.

Tax on a used car in BC is still PST collected at registration. Luxury car tax is not a different form or a different office. It is the same PST, at a higher rate, once the taxable value reaches $125,000 or $150,000.