Instead of driving the 2008 Dodge Ram pickup he bought at a private sale last month, Chris Lethbridge parked it, uninsured, at his home in Salmon Arm, B.C.
If the truck is damaged or stolen, he knows he won’t be able to file a claim with ICBC. However, he remains without financial protection and without additional kilometers on the odometer.
“It’s an $11,000 paperweight sitting in my driveway,” Lethbridge told CBC’s Daybreak South. “And I’m not the only one in the province dealing with it.”
On October 1st, a new provincial regulation regarding the sale of personal vehicles came into effect.
Instead of paying 12 per cent provincial sales tax (PST) on the actual sales price of the 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 Guide to evaluate the Black Book.
That upsets Lethbridge and others like it and calls for action.
Lethbridge says he paid $2,100 for his Dodge Ram at a private sale. But when he went to register the vehicle, the insurance agent told him it had a Canadian Black Book value of $11,000 and he had to pay PST on that amount.
“I was a little puzzled,” Lethbridge said.
Chris Lethbridge of Salmon Arm, British Columbia, bought a 2008 Dodge Ram in a private transaction in October and is upset about the provincial government’s new rules for paying PST on such purchases. (Chris Lethbridge)
Lethbridge said he obtained a temporary operating permit so he could drive the truck from nearby Kamloops, where he made the purchase, back to Salmon Arm.
While the truck is now gathering dust, Lethbridge says he’s been trying to find a satisfactory solution to his situation.
“There must be light at the end of the tunnel. There should be.”
The changes bring British Columbia in line with other provinces, the government says
The provincial government says it made the change to prevent buyers from understating the purchase price of a car in private transactions and then paying PST on those lower numbers. That loophole, he said, could create an annual PST revenue shortfall of nearly $30 million.
Buyers who wish to dispute the list value can hire a qualified appraiser to assess their car’s value and present the assessment to ICBC at the time of registration.
The guidelines state that if the assessed value and the price paid are lower than the average wholesale value in the Canadian Black Book guide, the amount of PST due is calculated based on the greater of the price paid and the assessed value of the vehicle.
However, paying for an appraisal is the buyer’s responsibility.
In a statement emailed to the CBC, Finance Minister Selina Robinson says the change brings BC “in line with how most other provinces already administer sales taxes on these vehicles.”
Robinson also pointed to the appraisal option available to buyers.
An online petition is calling for change
Graham Hugill is also upset about the new regulation.
The resident of 150 Mile House in BC 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 the Canadian black book value of $47,240.
“It’s basically stealing from me,” Hugill said.
As in the Lethbridge case, Hugill keeps his truck at home, unregistered.
In protest of the new regulation, Hugill started an online petition. As of Thursday afternoon, there were nearly 7,000 signatures.
“I started the petition because I’m a 60-year-old man and I’m tired of being taxed to death.
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