Car Sales Tax by Province in Canada (2026)

A vehicle is taxed at the same GST, HST or provincial rate as anything else you buy (the sales tax by province page has every rate), but four things make the tax on a car different: whether you buy from a dealer or a private seller, British Columbia’s higher PST on pricier vehicles, the federal luxury tax, and the trade-in. This page covers each. For the tax on any other price, use the sales tax calculator.

Tax on a car bought from a dealer

A dealer charges the GST or HST, plus the provincial tax where there is a separate one. The table shows the tax on two prices, with no trade-in:

British Columbia’s figure jumps between the two prices because its PST on a $60,000 vehicle is 10%, not 7% (see the next section). Everywhere else the tax simply scales with the price.

British Columbia’s graduated vehicle PST

BC charges more PST as a passenger vehicle’s price rises. For a vehicle bought from a dealer, the rate is set by the whole purchase price:

The band applies to the entire price, not just the part above $55,000, which makes the band edges expensive. A $54,999 vehicle carries $3,850 of PST, while a $57,000 one carries $5,700:

The figures below leave out the federal luxury tax: on a car priced over $100,000 it is added as well, and the GST is then charged on the price plus the luxury tax.

Zero-emission vehicles get a higher starting point: for ones acquired until February 22, 2027, the first higher band begins at $75,000 instead of $55,000. The British Columbia sales tax page covers the rest of BC’s PST.

Private used-vehicle sales

A private seller doesn’t charge GST, so a private sale carries only the provincial tax, paid when you register the vehicle. In the HST provinces it is a separate provincial tax at the same rate as the HST (Ontario’s is its retail sales tax). Almost every province taxes the greater of the price you paid and a book or wholesale value, so under-declaring the price doesn’t lower the tax.

Most of these provinces also exempt a used vehicle given as a gift by a close family member (Prince Edward Island taxes a family transfer only on any price paid), but who counts as family varies: Ontario’s list covers spouses, parents, grandparents, children and grandchildren (step-relatives included), siblings and in-laws, while Manitoba taxes gifts from siblings. Some, including BC, Saskatchewan and Manitoba, also require that tax was paid on the vehicle before. BC, Ontario and Prince Edward Island let you use a written appraisal instead of the book value when the vehicle is worth less. Nova Scotia accepts an appraisal done at your expense within 2 months of buying or registering the vehicle, but an appraised value below the wholesale value has to be backed by proof of extensive damage. If excessive mileage or extensive damage leaves the vehicle below average condition, you can also ask the Provincial Tax Commission for an informal review within 30 days of your tax assessment.

BC’s private-sale rate is a flat 12% below $125,000, the same total as the 12% GST and PST a dealer charges on a vehicle under $55,000:

Federal luxury tax

On top of sales tax, new passenger vehicles priced over $100,000 carry the federal luxury tax, in force since September 1, 2022. The dealer collects it, and it is the lesser of two amounts: 10% of the full price, or 20% of the amount above $100,000. Most used vehicles already registered in Canada are exempt, and ambulances, hearses, marked police, fire and emergency vehicles, and motorhomes are excluded.

Up to $200,000, the amount-over-threshold figure is the smaller one; above it, the full-price figure is. A $150,000 car therefore carries $10,000 of luxury tax. The GST is charged on the price including the luxury tax, since federal taxes the seller collects are part of the taxable amount under the Excise Tax Act: $8,000 of GST on $160,000, with any provincial sales tax added under the province’s own rules (BC’s bands are in the table above).

How a trade-in lowers the tax

When a dealer accepts your used vehicle, or other used goods, as full or partial payment, the GST or HST is charged on the price minus the amount the dealer credits you for the trade-in, as long as you aren't required to collect GST/HST on the trade-in yourself, as a registrant trading in a business asset would be. That holds in every province (Excise Tax Act, s. 153(4)). The provinces with a separate tax apply the same reduction to it, with conditions in BC and Saskatchewan. In BC, tax must have been paid on the trade-in (or it must have been exempt), and the PST reduction also applies when a private seller accepts your vehicle in trade. Saskatchewan charges PST on the price minus the credit allowed for a trade-in, whether a dealer or a private seller accepts it, as long as Saskatchewan tax was paid on the trade-in, it isn't exempt, and it is yours and traded in at the time of the sale. A private sale has no GST to reduce.

For a $40,000 car with a $15,000 trade-in:

The saving is the trade-in value multiplied by the full tax rate, so it is largest where the rate is highest. Selling your old car privately may get you a higher price, but you give up that tax saving, so compare the two before deciding.

EV rebates

The federal Electric Vehicle Affordability Program (EVAP) takes money off an eligible new vehicle at the point of sale, applied by the dealer, for purchases and leases from February 16, 2026 to March 31, 2031 (or until the funding runs out). The maximum drops each year and is set by the date the dealer submits your eligibility assessment, not the purchase date: in 2026 it is $5,000 for a battery-electric or fuel cell vehicle and $2,500 for a plug-in hybrid, falling to $2,000 and $1,000 from 2030. The final price must be $50,000 or less, except for Canadian-made vehicles, and the vehicle must be made in Canada or in a country with a free-trade agreement with Canada. An individual can receive the rebate only once over the life of the program. Leases qualify if they run at least 12 months, with a prorated amount for leases shorter than 48 months. Sales tax is charged on the price before the rebate, so it doesn’t reduce the tax.

Provincial rebates are shrinking. BC’s CleanBC Go Electric passenger-vehicle rebate is paused, and Quebec’s Roulez vert program ends on December 31, 2026. Check with your province before counting on one.

Related pages

• Sales tax by province: every province’s rate and how the three systems work
• Sales tax calculator and reverse sales tax calculator
• Car loan calculator
• Average car insurance cost and cheapest cars to insure