BC luxury tax surcharge - Page 4 - Rennlist - Porsche Discussion Forums

Notices

BC luxury tax surcharge

Old 02-24-2018, 03:33 AM
  #46  
r8v10plus
User
 
Join Date: Jan 2016
Posts: 31
Default

Wow, that's the LP580 which is RWD. I had the same car and traction was awful on slightly wet roads during the summer so just imagine driving a RWD Lambo on snow/ice.
r8v10plus is offline  
Old 02-24-2018, 04:04 AM
  #47  
creaturecat
User
 
Join Date: Dec 2002
Location: Vancouver B C
Posts: 997
Default

Originally Posted by 09RedGTS View Post
Wow! I had no idea some Canadian provinces were on the march to that level of taxes! I'd be poor if retired in Vancouver.

Just for comparison, here in my Suburban Orlando Florida county, sales tax on any auto is 6.25%. 93 octane premium gasoline is $2.90/gallon (about $.75/L), there is no state income tax, and real estate taxes are low (typically around 1% of time value/year). Home prices are still reasonable, typically $160 to $200/sq ft for new homes and less for late model used homes, and the tech sector here is growing with lots of job openings in engineering and IT. Auto insurance? My 2015 991.1 C2S is insured to the max $500k with $500 deductibles and $100k uninsured motorist, and costs about $950/year. Those are some of the reasons we retired here.
1.5 - 1.8M to buy a filthy tear down ****-shack - on a 30 ft lot. in Vancouver.
6 bucks for a gallon of premium gasoline. 50 bucks for a 24 of Budweiser.
creaturecat is offline  
Old 02-24-2018, 03:08 PM
  #48  
na94
User
 
Join Date: Nov 2017
Posts: 54
Default

Originally Posted by 09RedGTS View Post
Wow! I had no idea some Canadian provinces were on the march to that level of taxes! I'd be poor if retired in Vancouver.

Just for comparison, here in my Suburban Orlando Florida county, sales tax on any auto is 6.25%. 93 octane premium gasoline is $2.90/gallon (about $.75/L), there is no state income tax, and real estate taxes are low (typically around 1% of time value/year). Home prices are still reasonable, typically $160 to $200/sq ft for new homes and less for late model used homes, and the tech sector here is growing with lots of job openings in engineering and IT. Auto insurance? My 2015 991.1 C2S is insured to the max $500k with $500 deductibles and $100k uninsured motorist, and costs about $950/year. Those are some of the reasons we retired here.
My wife: "But Florida has Hurricanes!" Oh yeah...
na94 is offline  
Old 02-26-2018, 02:14 PM
  #49  
v3n0m
User
 
Join Date: Jan 2014
Posts: 7
Default

So the new luxury surcharge is a tax on the entire amount, right?

So, for example, a $250k car = $50k PST + $12.5k GST = $62.5k total tax

Can't you reduce it by having a dealer do a few buy/trade transactions on the books?

e.g.
Buy $125k car = $12.5k PST + $6.25k GST = $18.75k
Immediately trade it in for the same value for $250k car:
250k-125k = 125k (diff taxed at 20% PST according to previous post) yielding: $25k PST + $6.25k GST = 31.25k

Total tax by splitting it into two transactions is $50k vs $62.5k in one transaction. You could reduce it further by doing these rotating transactions at every percentage tier bump.

Is this right, or am I misunderstanding how the surcharge works (and it's only charged on the amounts over the tiers, like income tax)?
v3n0m is offline  
Old 02-26-2018, 02:16 PM
  #50  
Bacura
User
 
Bacura's Avatar
 
Join Date: Sep 2013
Posts: 1,698
Default

Do you really think a dealer would do that?
Bacura is offline  
Old 02-26-2018, 04:26 PM
  #51  
v3n0m
User
 
Join Date: Jan 2014
Posts: 7
Default

Why not? It’s legal and the one that does would get the deal flow.
v3n0m is offline  
Old 02-26-2018, 04:30 PM
  #52  
Bacura
User
 
Bacura's Avatar
 
Join Date: Sep 2013
Posts: 1,698
Default

I have no idea why not. I'm not an accountant or a tax lawyer. Seems to me those new cars you are "trading" in are now used cars and why would the dealer want all that extra paperwork? I suspect that is not the intent of the new tax law. Maybe a tax lawyer could give us an educated opinion on it rather than opinion,speculation and hyperbole.
Bacura is offline  
Old 02-26-2018, 04:49 PM
  #53  
mistermct
User
 
mistermct's Avatar
 
Join Date: Feb 2012
Location: Vancouver, BC
Posts: 342
Default

Originally Posted by MaxLTV View Post
Anyway, I found the answer to my original question. With a trade-in, the tax rate is calculated based on the value of the car bought, regardless of the trade in value. But the amount taxed has trade-in value deducted. So buying $150K car with $100K trade-in will be taxed at 25% rate but on only the difference ($50K).
Originally Posted by v3n0m View Post
So the new luxury surcharge is a tax on the entire amount, right?

So, for example, a $250k car = $50k PST + $12.5k GST = $62.5k total tax

Can't you reduce it by having a dealer do a few buy/trade transactions on the books?

e.g.
Buy $125k car = $12.5k PST + $6.25k GST = $18.75k
Immediately trade it in for the same value for $250k car:
250k-125k = 125k (diff taxed at 20% PST according to previous post) yielding: $25k PST + $6.25k GST = 31.25k

Total tax by splitting it into two transactions is $50k vs $62.5k in one transaction. You could reduce it further by doing these rotating transactions at every percentage tier bump.

Is this right, or am I misunderstanding how the surcharge works (and it's only charged on the amounts over the tiers, like income tax)?
see above
mistermct is offline  
Old 02-27-2018, 08:31 PM
  #54  
Jamie140
Addict
Rennlist Member
 
Jamie140's Avatar
 
Join Date: Sep 2003
Location: Burlington/Sudbury/Marco Island, Florida
Posts: 4,928
Default

How are leases taxed?
Jamie140 is offline  
Old 02-27-2018, 08:42 PM
  #55  
MaxLTV
Addict
Rennlist Member
Thread Starter
 
MaxLTV's Avatar
 
Join Date: Jan 2013
Location: West Vancouver and San Francisco
Posts: 2,532
Default

Originally Posted by Jamie140 View Post
How are leases taxed?
Same - tax rate calculated off the vehicle's price and then applied to the lease payments.
MaxLTV is offline  
Old 02-27-2018, 08:50 PM
  #56  
Porschefan604
User
 
Join Date: Dec 2016
Posts: 13
Default

Originally Posted by v3n0m View Post
So the new luxury surcharge is a tax on the entire amount, right?

So, for example, a $250k car = $50k PST + $12.5k GST = $62.5k total tax

Can't you reduce it by having a dealer do a few buy/trade transactions on the books?

e.g.
Buy $125k car = $12.5k PST + $6.25k GST = $18.75k
Immediately trade it in for the same value for $250k car:
250k-125k = 125k (diff taxed at 20% PST according to previous post) yielding: $25k PST + $6.25k GST = 31.25k

Total tax by splitting it into two transactions is $50k vs $62.5k in one transaction. You could reduce it further by doing these rotating transactions at every percentage tier bump.

Is this right, or am I misunderstanding how the surcharge works (and it's only charged on the amounts over the tiers, like income tax)?

You bring up a good point. Suppose I’m buying a $150K 911, these should be two perfectly legal options:

A. Pay cash in full = $150K + 25% tax = $187.5K

B. I trade in (one or multiple cars) = $150K. Luxury tax is applicable to my new 911 is $150K - $150K (trade) = $0
* if I don’t have a trade in worth $150K, I buy two cars worth $75K each + 15% tax = $172.5K

Difference between A and B is $15K, exactly the (10%) premium the “luxury tax” is supposed to be charging.

*B assumes I can perfectly find two used cars to cancel out my taxes on the new one. But... suppose a dealer is willing to go along with it, it’s simply paperwork for them. I “buy” two used boxsters off their lot for $75K + 15% tax. Register and insure them for a week (minimal cost) and the cars never leave their showroom; no risk of accident or depreciation. I “trade” them back to the same dealer a week later when I pickup my new $150K 911.

Doesn’t seem like too much trouble to me to save $15K. Any reason why the above won’t work? Only downside I can see for the dealer is having used cars with more owners on title, albeit for only a brief period that can be easily explained.
Porschefan604 is offline  
Old 02-27-2018, 10:02 PM
  #57  
BioBanker
User
 
BioBanker's Avatar
 
Join Date: Jun 2006
Location: West Vancouver
Posts: 1,580
Default

Aside from the fact that PST is connected to registration and in order to register a car you need to show its invoice (or show you have owned it elsewhere) that’s a great idea. Showing an invoice that doesn’t accurately show the tramsaction is fraud.
BioBanker is offline  
Old 02-27-2018, 10:21 PM
  #58  
tcsracing1
Addict
Rennlist Member
 
tcsracing1's Avatar
 
Join Date: May 2008
Location: Somewhere in a galaxy far, far away....
Posts: 16,028
Default

B.C is NDP which is it's first problem. Socialist dreamers.
Real estate is already overpriced in Vancouver and because times are "good", the govt feels foreign buyer tax grabs on Vancouver property is warranted. They are already grabbing money on "property transfer tax"... Disgusting.
The city could use a good "correction" to get the govt off their high horse. Nothing short of an earthquake or china closing it's doors to Canada would allow that to happen. Get everybody back down to reality.

This new luxury tax on automobiles as of April 1st 2018 is equally disgusting.
First of all, the fact that Vancouver dealers have been able to do so well in this economy is not something the govt should have the ability to take advantage of.
Dealers have employed record numbers of staff, invested millions in major renovations/facilities and contribute large taxes as result of the luxury auto demand boom. That should be enough for the govt.
The dealers need to be vigilant and stand up to this blatant discriminatory money grab based on the principal alone.

It was bad enough when a vehicle priced between $55,000.00-$59,999.00 warranted 1% additional PST on top of the 7% PST for "luxury" tax grab in B.C. That price is hardly a "luxury" vehicle nowadays...

$125k-$149k vehicles suffered 10% PST (3% over normal PST) which was in bad taste IMO, and now the govt wants it to be 15% PST....
These taxes will be like owning a vehicle in Europe!

What is even more disgusting is the vehicles over $150k. The govt appears to feel it is fair to take the already gangster 10% PST and bump it to $20% PST. Criminal. Those who work hard for what they have and have risked it all to enjoy the rewards only to get penalized? I dont think so.

These PST bumps combined with the 5% GST become too high of a surcharge and makes B.C look like a petty money grab province.

I for one will not be paying these outrageous hikes for the sake of living in B.C. It is a good place, but not that good. It rains half the year and is overpriced.
I rather cut my "luxury" spending in B.C and have a secondary "luxury" automobile someplace else to enjoy it the other half of the year.
I will just continue to drive my outdated pollution causing vehicles in B.C to show the NDP how I really feel about their gouging. No upgrades for me.

Anybody paying these outrageous amounts of tax to own a significant "luxury" vehicle in B.C will be non competitive nationally come resale time. People who can afford these vehicles may very well be turned off based on the principal alone. Not good financial sense for the fiscially responsible.

I feel bad for anybody in the collector car market in B.C.
It is a royal kick in the ***** and spit in the face courtesy of the narrow minded thinking of the NDP socialist party.
tcsracing1 is offline  
Old 02-27-2018, 10:26 PM
  #59  
Porschefan604
User
 
Join Date: Dec 2016
Posts: 13
Default

Originally Posted by BioBanker View Post
Aside from the fact that PST is connected to registration and in order to register a car you need to show its invoice (or show you have owned it elsewhere) that’s a great idea. Showing an invoice that doesn’t accurately show the tramsaction is fraud.
How is it fraud if the transaction(s) are completed? In my example, PST and GST are still paid (at the lower rates) and title is still transfered. It’s just a shorter period of ownership than usual. It’s not illegal to own a car for a week, change my mind and trade in for something else.
Porschefan604 is offline  
Old 02-27-2018, 11:37 PM
  #60  
PCA1983
User
 
PCA1983's Avatar
 
Join Date: Apr 2014
Location: Orlando (winter), Chicago (Summer)
Posts: 1,303
Default

Originally Posted by creaturecat View Post
1.5 - 1.8M to buy a filthy tear down ****-shack - on a 30 ft lot. in Vancouver.
6 bucks for a gallon of premium gasoline. 50 bucks for a 24 of Budweiser.
Wow that is high priced beer! Id look at keg pricing. Florida is relatively high beer price, but we can still get a 24 case of Bud or Miller Lite Pints for $20.

Originally Posted by na94 View Post
My wife: "But Florida has Hurricanes!" Oh yeah...
​​​​​As for hurricanes here, the risk is low along the Central FL Atlantic Coast. We are about 32 miles inland (35 miles to Daytona Beach), so no risk of storm surge. Worst that happens is wind and rain, and maybe a power outage. The utility FPL has been storm hardening their distribution system here since 2004. The worst that is likely to happen is a few days of "lights out" nowadays.
But we are retired snowbirds and head for Chicagoland in the warm weather, so we don't have to worry about that.
PCA1983 is offline  

Thread Tools
Search this Thread

Contact Us Advertising Cookie Policy Privacy Statement Terms of Service

© 2018 MH Sub I, LLC dba Internet Brands

We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliated sites.
 
  • Ask a Question
    Get answers from community experts
Question Title:
Description:
Your question will be posted in: