B.C. Budget 2022 makes used EVs exempt from PST, increases threshold for luxury surtax on new EVs up to $75,000

The British Columbia government released its 2022-2023 budget on Tuesday, unveiling two new initiatives that will help boost zero-emission vehicle (ZEV) adoption in the province.

PST exemption on used ZEVs

B.C. currently offers up to $3,000 off the purchase of a new ZEV. Effective immediately, the government has also made used ZEV purchases exempt from the Provincial Sales Tax (PST).

The PST exemption applies to purchases made from dealers as well as private third parties. The ZEV must also have at least 6,000km on the odometer if it is a private sale, but the same rule doesn’t apply to purchases from dealers.

This will save buyers 7% on their ZEV purchase, and will be in effect for five years until February 22, 2027.

Luxury Surtax on new ZEVs

With Budget 2022, the government also increased the threshold for the luxury surtax on new ZEVs to $75,000, up from the previous base of $55,000.

Since 2018, vehicles with a purchase price of between $55,000 and $55,999 paid an extra 1%. Those priced between $56,000 and $56,999 paid an extra 2%, while any vehicles priced over $57,000 paid an extra 3%, for a total of 10% PST.

Now any ZEV priced below $75,000 will be exempt from the surtax.

The government says the change is intended to help offset the greater upfront cost of purchasing a ZEV compared to a comparable internal combustion engine (ICE) vehicle.

Editor’s note: The story was updated to clarify that the 6,000km rule only applies to private sales.

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