Luxury used cars — vehicles priced above $100,000 — face a significant tax burden in Canada In 2026, luxury used car tax canada 2026 . The federal Select Luxury Items Tax (SLIT) applies equally to new and pre-owned vehicles, and BC layers an additional provincial luxury surcharge on used car purchases.
For more information, visit the Car Tax Payment Guide.
luxury used car tax canada 2026 — Federal SLIT on Used Luxury Vehicles
The Select Luxury Items Tax (SLIT), introduced September 1, 2022, applies to the purchase of passenger vehicles with a price above $100,000. The tax rate is 10% on the amount above the threshold, regardless of whether the vehicle is new or pre-owned.
The $100,000 threshold applies to the total purchase price — there is no adjustment for the vehicle's prior use or depreciation. A three-year-old vehicle purchased for $120,000 pays the same SLIT as a brand new one at the same price.
luxury used car tax canada 2026 — Luxury Used Car Tax by Province — $150,000 Example
Tax on $150,000 Used Car by Province — 2026
| Province | Provincial Tax | SLIT (10%) | Total Tax |
|---|---|---|---|
| Alberta | $7,500 (GST) | $5,000 | $12,500 |
| BC | $15,000 (GST+PST+lux) | $5,000 | $20,000 |
| Ontario | $19,500 (HST) | $5,000 | $24,500 |
| Quebec | $20,963 (GST+QST) | $5,000 | $25,963 |
| Atlantic Canada | $22,500 (HST) | $5,000 | $27,500 |
luxury used car tax canada 2026 — BC Luxury Surcharge — Why BC Is Most Expensive
BC is the only province that adds a provincial surcharge specifically on luxury vehicles. The additional 8% PST applies to the portion above $100,000 on top of the standard 7% PST.
Breakdown for a $150,000 used car in BC:
- GST 5% on $150,000 = $7,500
- Base PST 7% on $150,000 = $10,500
- Luxury PST 8% on $50,000 above $100K = $4,000
- Federal SLIT 10% on $50,000 = $5,000
- Total: $27,000
luxury used car tax canada 2026 — Options for Avoiding Luxury Tax on Used Cars
- Buy below $100,000: The simplest approach — a $99,000 vehicle pays no luxury tax
- Choose an SUV with GVWR over 3,856 kg: Trucks and large cargo vans are exempt from SLIT
- Consider certified pre-owned under $100K: CPO vehicles in the $80K-$100K range offer luxury features without the tax hit
- Lease instead of buy: Some lease structures may have different tax treatment — consult a tax professional
Disclaimer: Luxury tax rules are set federally. Verify current rates and exemptions with CRA and BC Finance before purchase.
For official information, visit ServiceOntario, Manitoba Provincial Sales Tax.
Key Points to Remember
When planning your vehicle purchase, it is important to consider all applicable taxes and fees. Provincial sales tax rates, federal goods and services tax, and any luxury taxes on high-value vehicles can significantly affect the total cost. Research your specific province and vehicle type before making a purchase decision.
Common Questions
Many vehicle buyers have questions about tax rates and exemptions. Understanding when provincial sales tax applies, how trade-in values affect the tax base, and which vehicle types qualify for exemptions can save you thousands of dollars. Consult your provincial vehicle registry or a tax professional for specific advice.
Key Points to Remember
When planning your vehicle purchase, it is important to consider all applicable taxes and fees. Provincial sales tax rates, federal goods and services tax, and any luxury taxes on high-value vehicles can significantly affect the total cost. Research your specific province and vehicle type before making a purchase decision.
Common Questions
Many vehicle buyers have questions about tax rates and exemptions. Understanding when provincial sales tax applies, how trade-in values affect the tax base, and which vehicle types qualify for exemptions can save you thousands of dollars. Consult your provincial vehicle registry or a tax professional for specific advice.