Instead of driving the 2008 Dodge Ram pickup he bought at a private sale last month, Chris Lethbridge has it parked, uninsured, at his home in Salmon Arm, British Columbia.
If the truck is damaged or stolen, he knows he won’t be able to file an insurance claim. Nevertheless, it sits there with no financial protection and no extra miles rolling on the odometer.
“It’s an $11,000 paperweight sitting in my driveway,” Lethbridge told CBC South Dawn. “And I’m not the only one in the province facing this.”
On October 1, a new provincial regulation regarding the sale of private vehicles came into effect.
Instead of paying 12% Provincial Sales Tax (PST) on the actual selling price of a vehicle at the time of purchase, buyers must now pay PST at the time of registration, with the tax based on the average wholesale value of the vehicle in Canada. Black Book Appraisal Guide.
It shocked Lethbridge, and others like him, and called for action.
Lethbridge says it paid $2,100 for its Dodge Ram at a private sale. But when he went to register the vehicle, the insurance agent told him that it had a Canadian Black Book value of $11,000 and that he had to pay PST on that amount.
“I was a bit stunned,” Lethbridge said.
Lethbridge said he got a temporary business license so he could drive the truck from Kamloops, where he made the purchase, to Salmon Arm.
As the truck now gathers dust, Lethbridge says he has been trying to find a satisfactory solution to his situation.
“There must be a light at the end of the tunnel. There must be.”
Changes bring B.C. in line with other provinces, government says
The provincial government says it made the change to prevent buyers from understating the purchase price of the vehicle in private transactions and then paying PST on those lower figures. This loophole, he said, could create an annual shortfall of nearly $30 million.
Buyers who wish to dispute the face value can hire a qualified appraiser to appraise the value of their vehicle and present the appraisal to the Insurance Corporation of BC (ICBC), the provincial auto insurer, at the time of registration.
The guidelines state that if the appraised value and the price paid are both less than the average wholesale value listed in the Canadian Black Book guide, the amount of PST due is calculated on the greater of the price paid and the value vehicle estimate.
Paying for an appraisal, however, is the buyer’s responsibility.
In an emailed statement to CBC, Finance Minister Selina Robinson said the change brings B.C. “in line with how most other provinces already administer sales taxes on these vehicles.”
Robinson also highlighted the valuation option available to buyers.
Online petition calls for change
Graham Hugill is also upset with the new regulations.
The resident of 150 Mile House in the B.C. interior said he bought a 2015 Ford F-30 truck for $35,000 at a private sale. He said he had all the paperwork with him when he went to register the vehicle and was told he had to pay PST based on a Canadian Black Book value of $47,240.
“It’s stealing, basically, on my part,” Hugill said.
As is the case in Lethbridge, Hugill has the truck at home, unregistered.
To protest the new regulations, Hugill launched an online petition. Thursday afternoon, it had nearly 7,000 signatures.
“I started the petition, because I’m a 60-year-old man, and now I’m sick of being taxed to death.”