The end of cheap (and insurable) vehicles in BC

[Scott Cee AKA 2drx4]

It happened today.

Now when you go to transfer a vehicle you must pay 12% tax on the BOOK value. What is book value? I don't know, probably way more than you paid though. With the only exception being if you have the vehicle appraised, and then you can pay the appraised value.

I went in to complete a transfer today, and there was a big lineup of people despite a ton of agents being on. Odd. Everyone who sat down to do a transfer was taking forever. Uh-oh. I sit down and explain it's just a transfer, no insurance required. The agent calmly asks if I know about the new rules, and I say "Sure, the multiple driver thing, that's been around for a while." He says "No, you now have to pay tax on the book value, not the declared sale value." Oh shit, they were talking about that, I didn't realize it came into effect today.

I bought a POS Canyon that doesn't run for $400. Transfer tax was $780. Anything that is NFG, non-running, beat up, etc, is not going to be worth purchasing anymore if you plan to transfer it based on that.

Luckily the agent pointed out to me that since I'd actually paid for it yesterday that it didn't apply. Bullet dodged. But man, that's it, no more crappy vehicles for me, unless I'm just going to part them out. I'm sure this is going to lead to a lot of older vehicles just going straight to the crusher, because who is going to buy something if there's many hundreds/thousands of dollars of tax on junk.

[arse_sidewards]

How many fronts can the state financially squeeze us on before we start putting bullets in relevant parties? Energy, transportation, food, they're hitting us everywhere. Just something to think about.


That said, many US states do it that way and most have some sort of gift exemption. It's just another form for the seller to fill out so they buyer doesn't pay tax.

[Scott Cee AKA 2drx4]

That said, many US states do it that way and most have some sort of gift exemption. It's just another form for the seller to fill out so they buyer doesn't pay tax.

I didn't ask about that actually. There is a gift form, but I'm suspecting you still are going to be paying tax...

[Scoobienorth]

This is partially the fault of the people that way under value the price they actually bought the vehicle for on the insurance papers. Kinda seen this coming.

[Scott Cee AKA 2drx4]

This is partially the fault of the people that way under value the price they actually bought the vehicle for on the insurance papers. Kinda seen this coming.

No, this is the fault of having a system that is unfairly taxing a transfer to begin with. This isn't a new good. This is a used good that had PST/GST/HST (VAT one way or another) paid on it in full the day it left the dealer's lot. The government did not add value to the transaction, and therefore has no basis to demand they receive a 12% asset transfer tax. Any perception of value they can claim to have added is only in the form of the registration recordkeeping, which is paid for by the owners separately via fees that considerably exceed the recordkeeping overhead.

They choose to tax used private vehicle transfers because they wanted the money, and they could since they have legal requirements for registration. This is a slippery slope to extending that mentality to any used good that some sort of paper-trail can be manufactured for. So, don't blame the person who didn't want to be extorted by an unfair and baseless tax unless you want to pay 12% tax on everything you buy off Facebook marketplace, Kijiji, Craigslist, a garage sale, a forum, a friend or family, etc. Personally I'm surprised it hasn't happened yet, and I could see them at some point demanding a tax on any payment made between private parties by E-transfer, cheque, or wire, unless you can prove it was gifted money (hell, they might tax that too).

With the OLD system, vehicles in BC were known to typically result in the government being handed more tax "revenue" than the original price of the vehicle by the time they were removed from the road. Now they want more. A lot more.

Ultimately this will result in hurting lower income people the most. I would not have bought this truck to fix if I had to pay the full transfer tax. It would simply be scrapped. This reality will be repeated many times over and dry up the already tight supply of inexpensive used vehicles. These vehicles are what you see a lot of people who are "just getting by" driving, as they do not have the credit (or ability to make payments) on a new vehicle. If they can finance a used vehicle, the financing on used vehicles is now looking at rates upwards of 10%,compunded by vehicle prices being elevated already due to lack of supply. The whole pandemic economic destruction resulted in a lack of new vehicle production and created a massive market distortion to begin with, which was already squeezing the used vehicle market, and nothing that the automakers are saying right now looks like it will correct that. As usual, government makes a mess, doubles down on it, hurts a bunch of people, then will have a flowery press conference to let you know how much better you're doing (and that you're just too stupid to know it, even if you can no longer pay your bills).

[arse_sidewards]

Ultimately this will result in hurting lower income people the most. I would not have bought this truck to fix if I had to pay the full transfer tax. It would simply be scrapped. This reality will be repeated many times over and dry up the already tight supply of inexpensive used vehicles. These vehicles are what you see a lot of people who are "just getting by" driving, as they do not have the credit (or ability to make payments) on a new vehicle. If they can finance a used vehicle, the financing on used vehicles is now looking at rates upwards of 10%,compunded by vehicle prices being elevated already due to lack of supply. The whole pandemic economic destruction resulted in a lack of new vehicle production and created a massive market distortion to begin with, which was already squeezing the used vehicle market, and nothing that the automakers are saying right now looks like it will correct that. As usual, government makes a mess, doubles down on it, hurts a bunch of people, then will have a flowery press conference to let you know how much better you're doing (and that you're just too stupid to know it, even if you can no longer pay your bills).

That's exactly the point. Drive up the up front price and TCO of the "minimum viable shitbox" and force the poors onto the bus. Same as inspections.

[Scott Cee AKA 2drx4]

That's exactly the point. Drive up the up front price and TCO of the "minimum viable shitbox" and force the poors onto the bus. Same as inspections.

And ICBC (the state run insurance ponzi scheme) has said in the past that they want to see more of the older "polluting" vehicles off the road.

Never mind there is no viable public transit option in 90% of the province.

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[Joe_the_ice_man]

I know a ton of people over there dont register/insure snowmobiles for exactly this reason. The cost of the transfer tax plus the registration/insurance is equal to several tickets. At what point is the government making "criminals" out of normal, good people, simply because it's cheaper for them to pay a fine than to follow the ridiculous laws the government makes?

(I know this because I used to enforce some of those laws, and quit for moral and personal reasons.)