If you’re looking forward to driving a new car in Grenada, you might want to stop a moment and consider some of the potential costs. As with driving anywhere in the world, there are taxes and rates to consider – and in Grenada, this can get quite expensive, especially if you’re importing from overseas.
So, let’s get right to it – here’s what you need to know about taxation on new vehicles in Grenada.
What’s the rate of tax on a new vehicle in Grenada?
According to Chapter 202A of the Motor Vehicles Tax Act, new cars at an engine capacity of 1201cc to (and including) 2000cc are subject to a 5% tax rate on purchase and registration.
This 5% rate is based on the market price at the time of sale. Generally, any cars with engines exceeding 2000cs are subject to a higher rate of 15%.
Other rates apply depending on what the car is intended to be used for. For example, commercial vehicles are taxed at 2.5%, whereas dual purpose vehicles – i.e., those used for business and private purposes – are taxable at 10%.
You’ll also need to pay licensing fees – for example, cars up to 1000cc pay $125, 1001cc to 1800cc pay $180, 1800cc to 2800cc pay $275, and 2801cc to 3800cc pay $290. A $125 inspection fee applies in all cases.
You’ll find a complete breakdown of applicable charges via the Grenadian government’s website.
Are used vehicles taxed differently in Grenada?
Yes – upon purchase and registration of a used vehicle in Grenada, you’ll be subject to the same 5% rate on engine sizes up to 1200c, but on cars with engines at 1201c to 2000c inclusive, you’ll pay a rate of 10%.
The 15% rate then applies if your used car’s engine exceeds 2000c. These rates are all worth bearing in mind before you start budgeting!
Do taxes apply to importing new cars into Grenada?
Yes – you’ll need to pay additional fees if you’re importing most cars into Grenada from overseas.
There’s typically standard VAT that applies to any vehicles imported from abroad, which is currently 15%. Then, there’s a customs service charge of 6%, and an environmental levy, which sits at $2,000.
You can, however, benefit from a slight relief if you are importing a vehicle and classed as a “returning resident” – you need to have been a Grenadian national living abroad for at least seven consecutive years and are returning to the island permanently.
The relief grants a 2% environmental levy on new vehicles that are up to four years old. There’s also a 50% concession, though the 6% customs charge remains.
This package is set up as an incentive for Grenadians who want to return home – and it can really cut the often expensive costs of importing cars back from abroad (even if they’re new)!
Are electric vehicles affected?
All electric vehicles imported into Grenada – regardless of age and size, it’s now completely free to import electric vehicles into the country. That also covers charging stations – it’s part of a major push to encourage 100% electric in the years to come.
Hybrid motorists will pay a flat rate of 25% tax on imported vehicles coming into Grenada, too.
These changes arise alongside the government introducing a new online platform through which citizens can pay different taxes depending on their work and circumstances.
Regardless, it’s great news for electric motorists – but for everyone else, there’s still a need to be careful with tax calculations.
Is it cheap to run vehicles in Grenada?
As you can see, it can be affordable to run cars and other vehicles in Grenada, though the tax system greatly favors smaller electric vehicles. Therefore, think carefully about what you’d like to import, and to what extent.
In many cases, it’s cheaper to simply buy on the island outright. And, with purchases via Island Motors, you always know where you stand when it comes to documentation and processing.
Thankfully, the tax rules regarding used cars are pretty clear – so when you start looking for your next vehicle through our used ads, make sure to refer to the official government guidance and budget ahead of time.