Letter to the editor: Tax rules on used vehicles confusing and unfair
In Canada we’ve got 4 books for estimated worth of used autos and the books don’t consider inflation charges, geographic location or car situation.
Re: Tax on non-public vehicle gross sales in B.C.
This was initially proposed in February 2022 to the folks of B.C. to fight the supposed lack of tax of collected on non-public gross sales,
For example, beforehand a car was bought for $1,500. The switch type states $500 was paid for the car. Tax was collected on the $500. The province now expenses black guide worth at 12 per cent.
B.C. Finance Minister Selina Robertson has acknowledged: “We’re following what different provinces are doing.” The one different province I might discover that does that is Manitoba, however why is there tax on non-public vehicle gross sales?
Manitoba has an eight per cent provincial retail gross sales tax (PST) that applies to all used automobile purchases and is both paid to the supplier or, for those who purchase privately, to Autopac, the province’s motorcar insurer. (Add the 5 per cent GST when shopping for from a supplier.)
With that stated, I not too long ago bought a used car for lower than market worth. After making the deal, the proprietor and myself attended an insurance coverage workplace in Kamloops to finalize the sale. After the e-transfer was accomplished, so was the paperwork, and that is the place the issue begins.
Upon the beginning of registering the bought car, I used to be knowledgeable that my tax quantity can be primarily based on $11,000. The insurance coverage agent knowledgeable me that this was black guide value, which BC states is 12 per cent taxable quantity.
I opted to not register my buy at that time and bought a non-registered TOP (Momentary Operation Allow) to get it house from Kamloops to Salmon Arm. This was on Oct 22.
I reached out to ICBC’s head workplace in North Vancouver to inquire on the latest modifications that had been first introduced in February 2022. I known as the pinnacle workplace a number of instances and every time I used to be given completely different info as to the “guide worth”.
I additionally reached out to a number of insurance coverage places of work and was once more given conflicting info. One workplace I known as stated my buy was valued between $8,300 and $10,700.
One other couldn’t discover my buy on the black guide web site and stated simply are available, pay tax on the acquisition value. The final workplace I reached stated the black guide values my buy at $13,500 primarily based on the VIN assuming it was in pristine situation.
The books don’t consider inflation charges, geographic location or car situation.
I made a decision to look the Canadian Black Guide myself and located my buy was valued at $3,660.00 – $4,120.00
In Canada we’ve got 4 books for estimated worth of used autos: Kelly Blue Guide, Canadian Black Guide, Edmunds Guide and Canadian Crimson Guide.
I used to be advised I can have an appraisal accomplished at my value ($150-$350) and submit it to ICBC however, if the appraisal is increased than book-stated worth, I pay on the upper worth.
The truck I purchased was marketed for $3,000 obo. I purchased the truck for $2,100 after negotiating the worth, realizing I must do some repairs. Most are actually accomplished at a price of roughly $1,800.
I purchased this truck as a result of my earlier car was needing repairs which might have value extra money than buying a used car. This truck match my funds.
For the previous two years we’ve got been locked down, misplaced jobs, misplaced livelihoods and struggled with the price of residing. Throughout this time there have been many autos given again to banks or bought to pay payments.
Non-public gross sales are the best way to go as we get again on our ft.
This new tax regulation is a slap within the face. With an already struggling working class, overinflated gasoline costs, elevated meals prices and residing bills the LAST factor we’d like is an unjust tax on all non-public car patrons.
The few that cheat the system is the place the main focus ought to be, not on each non-public purchaser. ICBC made $2.1 billion in 2021 through the pandemic. It’s a monopoly insurance coverage supplier and has been since being based by the Liberal authorities in 1974.
To rectify and make tax on used automobiles extra acceptable they need to take a look at different choices.
For instance:
Have a minimal sale value. Any car bought in BC for lower than $1,500 would require a provincial inspection on the purchaser’s expense previous to registering. Have these non-public gross sales verified at an insurance coverage workplace. Audit suspected false automobile sale costs. If bought for lower than market worth an appraisal is to be accomplished and delivered to an insurance coverage workplace on the time of registration and supply extra insurance coverage to cowl appraisal worth . These small easy steps will assist fight non-public gross sales tax fraud.
The typical annual costs for insurance coverage (by province) are:
British Columbia – common value $1,832 per yr, supplied by government-operated insurance coverage group, and is extraordinarily restricted to non-public protection.
Ontario – common value $1,528 per yr, supplied by privately-owned insurance coverage corporations.
Alberta – $1,316 per yr, supplied by privately-owned insurance coverage corporations.
Saskatchewan – common value $1,233 per yr, supplied by government-operated insurance coverage group.
Newfoundland and Labrador – common value $1,168 per yr, supplied by privately-owned automobile insurance coverage corporations.
Manitoba -cost of $1,140 per yr, supplied by government-operated insurance coverage group, no non-public Insurance coverage choices.
Nova Scotia – common value $891 per yr supplied by privately-owned insurance coverage corporations, no government-provided automobile insurance coverage.
New Brunswick – common value $876 per yr supplied by privately-owned insurance coverage corporations.
Prince Edward Island – common value $861.
Quebec – common value $717 per yr, making it the most cost effective province on the checklist. Insurance coverage is supplied by a authorities operated group, however drivers also can combine this protection with privately-offered insurance coverage.
As you’ll be able to see, there’s a huge distinction between the provinces on the reverse ends of the checklist. The typical value of automobile protection in Quebec is lower than half of the typical value in British Columbia, which has the best taxes, highest insurance coverage charges, highest rents and one of many highest prices of residing within the nation.
There isn’t a absolute assured answer to this drawback however overtaxing 3.5 million drivers just isn’t the proper option to do it (3.5 million drivers, together with your self, will at one time purchase a personal car).
I consider the brand new drivers shopping for their first automobile solely to get it house and never have the ability to register or insure it, the coed that’s fighting a part-time job, full-time research and may solely afford the $1,200 automobile that ICBC says is value $5000, or a single mother or father with a component time job who wants transportation however once more cannot afford the guide worth tax on a personal sale.
My truck that I purchased in October now sits in my driveway unregistered and uninsured due to this new tax regulation. I now name it my ICBC $11,000 paperweight.
In any case, the BC authorities has already acquired each GST and PST on the unique sale of the car. They’re receiving tax once more on every non-public sale.
With this new tax, I can see extra uninsured autos on our roads.
This motion by the finance minister at a time we’re simply getting again onto our ft just isn’t an answer to the issue. It would compound the issue. It’s unjust unethical motion on the folks of BC. It must be eliminated and reviewed and even put out to the folks of BC so we’re a part of the answer.
Chris Lethbridge
Salmon Arm
