The luxury surtax on new EVs just got a bit better
The luxury tax on new all-electric vehicles just got a bit better.
The BC government has increased its passenger vehicle surtax threshold for zero-emission vehicles from $55,000 to $75,000. But what exactly does this mean?
In the past, if you purchased an EV/ZEVs over $55,000 you would be charged more than 7% PST. Seen as a luxury tax, in some cases this was as much as 20% PST on your new ride.
Now, you need to spend over $75,000 to feel the pinch of the luxury surtax. Plus, qualifying used EV/ZEVs are now exempt from PST.
This is intended to address the greater acquisition cost of an electric-battery vehicle compared to a conventional gas vehicle, which is generally cheaper.
Based on the most recent statistics, 9.4% of BC’s new car sales in 2020 were electric-battery models. Ownership of EV/ZEVs is increasing at a faster pace than originally forecast. In response, in October 2021, the provincial government created more ambitious targets, with 100% zero-emission vehicle sales now set to begin in 2035 instead of 2040 as originally planned.
Here’s the new PST breakdown:
If you purchase/lease a new EV/ZEV:
Less than $75,000 = 7% PST
$75,000—$75,999.99 = 8% PST
$76,000—$76,999.99 = 9% PST
$77,000—$124,999.99 = 10% PST
$125,000.00—$149,999.99 = 15% PST
$150,000 and over = 20% PST