How much tax do you pay on a car in Canada?

Sales tax on a car depends on your province. In Ontario, you pay 13% HST on new cars and 13% RST on used private sales. In Alberta, you pay only 5% GST. In BC, you pay 12% (GST + PST) plus additional luxury tax on vehicles over $55,000. Quebec charges 14.975% (GST + QST). Atlantic provinces charge 15% HST.

Do you pay tax on a private car sale in Canada?

Yes. In most provinces, you pay provincial sales tax (PST or RST) when you register a privately purchased vehicle. The tax is calculated on either the purchase price or the wholesale/book value — whichever is higher. This prevents people from declaring a lower sale price to avoid tax. Rules vary by province.

What is the luxury tax on cars in Canada?

The federal luxury tax (Select Luxury Items Tax Act) applies to vehicles with a retail price over $100,000. The tax is the lesser of 20% of the value above $100,000 or 10% of the full value. Additionally, BC charges a provincial luxury surtax on vehicles over $55,000 (1–2% extra PST), and some other provinces have similar surcharges.

Car Sales Tax by Province in Canada (2026)

When buying a vehicle in Canada, you pay GST plus provincial sales tax — combined rates vary significantly by province and whether the vehicle is new or used.

Sales Tax on New Vehicles (From Dealer)

Province	GST	PST/HST	Total Tax Rate	Tax on $40,000 Car	Tax on $60,000 Car
Alberta	5%	0%	5%	$2,000	$3,000
BC	5%	7–20% PST*	12–25%	$4,800	$7,200+
Saskatchewan	5%	6% PST	11%	$4,400	$6,600
Manitoba	5%	7% RST	12%	$4,800	$7,200
Ontario	—	13% HST	13%	$5,200	$7,800
Quebec	5% GST	9.975% QST	14.975%	$5,990	$8,985
New Brunswick	—	15% HST	15%	$6,000	$9,000
Nova Scotia	—	15% HST	15%	$6,000	$9,000
PEI	—	15% HST	15%	$6,000	$9,000
Newfoundland	—	15% HST	15%	$6,000	$9,000
NWT/Nunavut/Yukon	5%	0%	5%	$2,000	$3,000

BC PST on vehicles is graduated — see BC luxury surtax section below.

Sales Tax on Used Vehicles (Private Sale)

Province	Tax Type	Rate	Based On	Notes
Alberta	No PST	0%	—	Only province with no tax on private sales
BC	PST	12% (or higher with surtax)	Purchase price or book value (higher)	Graduated rate for luxury vehicles
Saskatchewan	PST	6%	Purchase price or book value	Minimum value applies
Manitoba	RST	7%	Purchase price or book value (higher)	Paid at registration
Ontario	RST	13%	Purchase price or wholesale value (higher)	Paid at ServiceOntario
Quebec	QST	9.975%	Purchase price or book value (higher)	Paid at SAAQ registration
New Brunswick	HST	15%	Purchase price	Paid at registration
Nova Scotia	HST	15%	Purchase price or book value	Paid at registration
PEI	HST	15%	Purchase price or book value	Paid at registration
Newfoundland	HST	15%	Purchase price	Paid at registration

BC Luxury Vehicle Surtax

Vehicle Value (Purchase Price)	PST Rate
Up to $55,000	7%
$55,001–$56,000	8%
$56,001–$57,000	9%
$57,001–$124,999	10%
$125,000–$149,999	15%
$150,000+	20%

BC Surtax Examples

Vehicle Price	PST Rate	PST Amount	GST (5%)	Total Tax
$40,000	7%	$2,800	$2,000	$4,800
$60,000	10%	$6,000	$3,000	$9,000
$100,000	10%	$10,000	$5,000	$15,000
$150,000	15%	$22,500	$7,500	$30,000
$200,000	20%	$40,000	$10,000	$50,000

For non-vehicle purchases, use our BC sales tax calculator to work out the standard 12% GST + PST rate.

Federal Luxury Tax (Select Luxury Items Tax)

Feature	Detail
Applies to	Vehicles with retail price over $100,000
Tax calculation	Lesser of: 20% of value above $100,000 or 10% of full value
Who pays	Buyer (collected by dealer)
Effective since	September 1, 2022
Applies to used vehicles?	No — only on first retail sale

Federal Luxury Tax Examples

Vehicle Price	20% of Amount Over $100K	10% of Full Price	Luxury Tax (Lesser)
$90,000	$0 (under threshold)	N/A	$0
$110,000	$2,000	$11,000	$2,000
$150,000	$10,000	$15,000	$10,000
$200,000	$20,000	$20,000	$20,000
$300,000	$40,000	$30,000	$30,000

Trade-In Tax Credits by Province

Province	Trade-In Reduces Taxable Amount?	Example: $40K car, $15K trade-in
Alberta	N/A (no PST)	Tax on $40K: $2,000
BC	❌ No — tax on full price	Tax on $40K
Saskatchewan	❌ No	Tax on $40K
Manitoba	❌ No	Tax on $40K
Ontario	✅ Yes (on HST for new from dealer)	Tax on $25K: $3,250
Quebec	✅ Yes (on QST, dealer sales)	Tax on $25K: $3,744
New Brunswick	✅ Yes (on HST, dealer)	Tax on $25K: $3,750
Nova Scotia	✅ Yes (on HST, dealer)	Tax on $25K: $3,750
PEI	✅ Yes (on HST, dealer)	Tax on $25K: $3,750
Newfoundland	✅ Yes (on HST, dealer)	Tax on $25K: $3,750

EV Incentives That Offset Tax

Program	Amount	Eligibility
Federal iZEV rebate	Up to $5,000	New BEV or PHEV under MSRP cap
BC CleanBC Go Electric	Up to $4,000	BC residents, eligible EVs
Quebec Roulez Vert	Up to $7,000	Quebec residents, new EVs
Nova Scotia	Up to $3,000	NS residents, new/used EVs
PEI	Up to $5,000	PEI residents, new EVs
NB	Up to $5,000	NB residents, new EVs

Incentives reduce effective cost but do not reduce the sales tax base (tax is calculated on the pre-incentive price).

Tips to Minimize Car Tax

Strategy	Savings
Buy in Alberta (if feasible)	0% PST — only 5% GST
Trade in at dealership (ON, QC, Atlantic)	Tax on net price only
Buy used privately in Alberta	$0 tax
Stay under BC’s $55K PST surtax threshold	7% vs 10–20%
Stay under $100K federal luxury threshold	Avoid federal luxury tax
Claim EV incentives	Up to $5,000+ off effective price
Lease vs buy	Tax on lease payments, not full price (in most provinces)