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By Caden Fanshaw

Taxes

Critics slam tax changes on private sale of used vehicles in B.C.

Apr 12, 2022 | 5:25 PM

PRINCE GEORGE – If you’re planning to find a vehicle to buy privately in British Columbia, you may have to pay more in taxes than you were initially expecting.

In new legislation now in effect, the province will decide what the vehicle you are buying privately is worth for tax purposes. For example, you may purchase a vehicle at $3000, although the value of the vehicle may be assessed at $3500, the assessed value would be the taxable one over the negotiated price.

How the province will determine what used vehicles are worth is still a work in progress, the system is expected to be fully active in October.

The BC Liberals slammed the legislation calling it unnecessary.

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“Well really what’s happening is the province is essentially treating everyone as if they’re tax cheats and tax criminals,” said BC Finance Critic Peter Milobar. “So if you get a really good deal, they’ll say that’s great for you, but you still owe us the tax that we feel the vehicle is worth.”

In response, the BC Ministry of Finance said the only change here is that the amount owing is calculated on either the amount paid or the wholesale value of the vehicle. This is not a new tax. It’s a change to close a loophole and bring us into line with what most other provinces are already doing. 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.

If someone disagrees with the assessed value, the Ministry of Finance said people will be able to obtain an appraisal of the vehicle to lower the tax payable on the purchase.

The BC Liberals instead proposed the opposite, a tax exemption for used vehicles sold under $20,000 which was rejected in the legislature.

The Liberals claim the measure would provide up to $2400 of tax relief on used vehicle purchases and would help many people who can’t afford an electric vehicle and are facing increased costs of living.

The Canadian Taxpayers Federation also slammed the change to taxation, Kris Sims said “it’s mind-boggling that they’re doing something like this.”

“This should be ripped up and thrown in the garbage can,” said Sims.