Understand the tax
Purchase price and Average Wholesale Value
When your purchase price, Canadian Black Book’s Average Wholesale Value, and a completed appraisal disagree, BC’s rules identify exactly one of them as the figure PST is calculated on — never a blend, and never a guess.
Essential facts
- Three figures matter: the price you paid, Average Wholesale Value, and — if you have one — a well-supported appraised value.
- PST is generally calculated on whichever figure the comparison identifies as controlling.
- An appraisal only changes the result when both the price you paid and the appraised value are below Average Wholesale Value.
- Taxable value and tax rate are separate questions — this guide covers value only.
Three figures, kept separate
Three different numbers can be part of this comparison, and mixing them up is the easiest way to misread the rule:
- The price you paid — the amount on your bill of sale.
- Average Wholesale Value — Canadian Black Book’s benchmark for a typical vehicle of that year, make, model and trim.
- Appraised value — the value a completed appraisal supports, based on your vehicle’s actual condition and evidence.
PST is generally calculated on whichever of these figures the comparison below identifies — never an average of them, and never the appraised value automatically.
The comparison, exactly
If the price you paid is equal to or above Average Wholesale Value
The price you paid generally controls.
If the price you paid is below Average Wholesale Value, but the appraised value is equal to or above it
The appraisal does not create a lower taxable amount — Average Wholesale Value controls the comparison instead.
If both the price you paid and the appraised value are below Average Wholesale Value
The comparison may use the higher of the price you paid and the appraised value — never the appraised value alone.
Conceptually, not your figures
Say a buyer paid $12,000 for a vehicle with an Average Wholesale Value of $16,000. A completed appraisal, backed by evidence of the vehicle’s actual condition, supports $13,500. Both the price paid and the appraised value are below Average Wholesale Value, so the comparison may use the higher of the two — $13,500 in this illustration, not the $16,000 Average Wholesale Value. The applicable PST rate is a separate question, covered elsewhere.
These figures are fictional, rounded and for illustration only. They are not Canadian Black Book lookup data, not an estimate for any actual vehicle, and this example calculates no guaranteed savings or tax result.
Taxable value is not the tax rate
Two different questions
Everything above settles the value PST is calculated on. A separate question — what percentage applies to that value — is covered in BC vehicle PST rates: 12%, 15% and 20%. Confusing the two — treating a lower taxable value as though it changed the tax rate itself — is the mistake this guide is written to prevent.
No outcome is guaranteed. Underbook supports an appraised value based on the evidence you provide; the comparison above is applied by the Ministry of Finance and your Autoplan broker, not by Underbook.
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