Nova ScotiaNova Scotians who buy a used vehicle in a private sale pay a 14 per cent provincial sales tax when registering their purchase with the province. Kelly Smith, a Clare business owner, and Independent MLA Elizabeth Smith-McCrossin say it’s unfair to buyers.Vehicles sold privately are subject to a 14 per cent provincial sales tax that critics say is unfairUsed vehicles sold privately are subject to a sales tax when they’re registered with the province. (CBC)A Nova Scotian who owns a mobile business is calling on the government to end the tax on privately sold used vehicles, saying the extra cost unfairly affects low- and middle-income people living in rural communities.Kelly Smith’s mobile auction and liquidation business requires her to drive long distances, and every few years the Clare woman needs to replace her vehicle. She said the costs quickly add up, despite buying used and avoiding dealerships.”Probably most used car private sales need repairs, tires, etc.,” said Smith. “By the time that you get to the registration, then you have to pay that tax on top, which could have gone towards those other things that you need.”Nova Scotians who buy a used vehicle in a private sale outside of a dealership, whether from family, a friend or a stranger, pay a 14 per cent provincial sales tax when registering their purchase with the province. Taxes are based on the purchase price or the vehicle’s “fair value” as determined by the Canadian Red Book, whichever is greater.During the pandemic, used car prices in Canada soared. While they are coming down, the average cost of a used car in Nova Scotia in 2025 is about $27,563, according to the Clutch Used Car Pricing Report. Smith said in her rural community, having a car is not a luxury. It is a necessity to be able to go to the grocery store and work because there is a lack of access to public transportation. Buying a used car — though not as affordable as it once was — is the only option for some families, she said.Independent MLA Elizabeth Smith-McCrossin says it’s not fair to tax ‘the same asset again and again and again.’ (Michael Gorman/CBC)Elizabeth Smith-McCrossin, Independent MLA for Cumberland North, introduced a bill in March to eliminate the provincial sales tax on used vehicles already registered in the province and sold privately.At the time, she said the bill was aimed at “ensuring greater transparency and fairness to buyers.””This is double taxation,” Smith-McCrossin said Thursday in an interview. “When a vehicle is bought new, HST is already paid. So taxing the same asset again and again and again, every time it’s transferred to a new owner, some people would say that’s not fair, and I agree with that.”While the bill did not go to second reading, she said she hopes other rural MLAs whose constituents are struggling with the cost of living will pick it up.”People are desperate. They simply do not have enough money to get by month to month,” she said. Finance Minister John Lohr says the province has already made other tax cuts. (Dan Jardine/CBC)Finance Minister John Lohr said in an interview Friday he’s aware of the calls to eliminate the tax, but he could not say if a bill like Smith-McCrossin’s might be implemented someday.”We made a $500-million tax break this year for Nova Scotians and we’re committed to seeing our economy grow. As to the future, I can’t speak to that right now. We’ll see what happens,” said Lohr, who noted the government collects about $34 million a year through the tax on the sale of used cars.He pointed to efforts already undertaken by the government to ease the tax burden on Nova Scotians, including lowering the HST to 14 per cent from 15 per cent last April, and the increase to the basic personal tax exemption. He said both changes are saving families about $1,000 on average in tax reductions.Ultimately, the minister said he thinks those changes result in “a better tax cut” than what Smith and McCrossin-Smith are advocating for.”We did that because we recognize the impact on taxes on people. We’re concerned about affordability,” he said.Dealerships vs. private sellersSmith-McCrossin said she would also like to see the HST dropped altogether when a used vehicle is sold through a dealership, but acknowledged the province has less control over that. However, the MLA said there are ways to make that happen indirectly through provincial rebates. “The dealership would still have to collect, but they [could] get a rebate from the government,” she said. ABOUT THE AUTHORGiuliana is a journalist originally from Lima, Peru. She is interested in stories about rural Nova Scotia, science, the environment and more. If you have any story tips, you can reach her at giuliana.grillo.de.lambarri@cbc.ca.
N.S. woman, MLA call on province to end ‘double taxation’ on used cars sold privately
