Paying the HST on a private sale | GTAMotorcycle.com

Paying the HST on a private sale

kgreen

kgreen

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So, if you're buying a used bike from someone on kijiji, you have to go to the MTO office and change the ownership. I did this recently and I simply showed them the UVIP which had the sale price written on it. They then calculated the HST due on the sale and I paid it.

But what if the bike was free as a gift? Or part of a swap (bike for bike+cash)? Or what if I just lied to avoid paying the HST? "Uh, ya, I bought it for a dollar." This seems silly but what if the bike was damaged and you were purchasing it for parts or wanted a project bike?

For cars, if no resale value is given, they look it up in the Canadian Red Book and use that value to calculate the HST. But it doesn't have motorcycles. So what do they do?

http://www.fin.gov.on.ca/en/guides/rst/209.html

RST is payable on the "fair market value" of a used motor vehicle purchased privately.
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Fair market value means the greater of the declared purchase price or the used motor vehicle's average wholesale value. The average wholesale value of a used motor vehicle is the amount stated in the Canadian Red Book or the Canadian Older Car/Truck Red Book (Red Book). If the average wholesale value per the Red Book is less than $1,000, then RST is payable on the declared purchase price of the used motor vehicle.
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Since the Red Book does not provide values for used motorcycles, the average wholesale value of a used motorcycle is the declared purchase price.
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Any thoughts on this? Does anyone here have any experience with stuff like this?
 
If you don't provide a value they will more than likely come up with one I'm sure, they want their HST after all.

Paid $1? Caution there, MTO spot checks private sales by sending a letter to the seller asking what the vehicle sold for.
If it doesn't match what was processed at the Service Ontario office, they can come after you for the balance of HST owing.
No idea how they would handle a trade...

A number of years ago I gave a 11 year old Mazda Pickup to one of my students to help him out.
The MTO declared a value and he paid whatever taxes were owing.
 
They go by the value that's on the bill of sale. But as ck said they may go to the seller to confirm that the value matches what you showed them. If it doesn't, well I'm sure they'll come after you for it. There's no database for sales of bikes so there's no guideline for them to charge you 'market value'.
 
i noticed that on the uvip of my car and bike. the car they give you a value to go by, the bike they don't...as for trade or gifting, have no idea.

found this though:

Some transfers may not require a Used Vehicle Information Package. For information on exemptions, spousal transfer and other types of transfers, complete the ​
feedback form
or contact ServiceOntario's Driver and Vehicle Contact Centre: ​
Toronto area: 416-235-2999
Toll free: 1-800-387-3445
(Canada wide)​
 
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Because bikes have no "blue book" value they will go by what the bill of sale says. You might get a letter asking you to confirm the price and the seller might get one as well. Just make sure you agree on the price that you wanna declare and if the letter comes just put that that price and it will be over with.

You cannot gift a bike or car to just anyone... it has to be immediate family only and you both have to sigh a "sworn affidavit for family gift". That is the only way you can get out of paying the HST. But outside of immediate family you will end up paying some sort of tax.
 
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YZFoxxy said:
Because bikes have no "blue book" value they will go by what the bill of sale says. You might get a letter asking you to confirm the price and the seller might get one as well. Just make sure you agree on the price that you wanna declare and if the letter comes just put that that price and it will be over with.
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Or agree to throw out any letter they send, as most people do just that.

YZFoxxy said:
You cannot gift a bike or car to just anyone... it has to be immediate family only and you both have to sigh a "sworn affidavit for family gift". That is the only way you can get out of paying the HST. But outside of immediate family you will end up paying some sort of tax.
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Unless you have the same last name and the person is very nice. I bought my dads truck from him and for a cheap old truck I didn't bother doing the paperwork for the transfer. I went to change everything over and the girl noticed the name was the same. She asked me if we were related and I told her it was my dad. She then processed it with no tax.
 
When I changed the ownership for my motorcycle from my brothers name to my name, I had to "buy" the bike from him because brothers cannot transfer ownerships.... I already payed the bike in full but had it under his name for insurance purposes. When I got a better rate I switched ownerships and at the MTO I payed $1 for my motorcycle, right in front of the lady at the desk... I took out a dollar, gave it to my brother, and he signed over the ownership. I payed a couple of cents taxes and that was it! that was 4 years ago no problems so far
 
imnothng said:
Or agree to throw out any letter they send, as most people do just that.



Unless you have the same last name and the person is very nice. I bought my dads truck from him and for a cheap old truck I didn't bother doing the paperwork for the transfer. I went to change everything over and the girl noticed the name was the same. She asked me if we were related and I told her it was my dad. She then processed it with no tax.
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You could throw it out but some people are paranoid about doing that especially if they get a second letter.

If you get lucky with the same last name it could work but it depends on the person that your dealing with at the MTO... some are more strict than others and you might need to provide proof and signatures. Every situation is different.
 
RicoChet said:
When I changed the ownership for my motorcycle from my brothers name to my name, I had to "buy" the bike from him because brothers cannot transfer ownerships.... I already payed the bike in full but had it under his name for insurance purposes. When I got a better rate I switched ownerships and at the MTO I payed $1 for my motorcycle, right in front of the lady at the desk... I took out a dollar, gave it to my brother, and he signed over the ownership. I payed a couple of cents taxes and that was it! that was 4 years ago no problems so far
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Maybe they changed the policy but when i transferred my brothers bike to my name 3 years ago i didn't have to buy... I just had to sign the paperwork saying he was family and he was gifting it to me. Like i said before I think it just depends on the agent the offices are privately owned and they all train their staff in different ways.
 
YZFoxxy said:
You could throw it out but some people are paranoid about doing that especially if they get a second letter.
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The anecdotal evidence I have from people I know is nothing comes of the letters, ever. They just stop sending them
 
espro said:
The anecdotal evidence I have from people I know is nothing comes of the letters, ever. They just stop sending them
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good to know... one of my friends sold his bike and got the first letter and threw it out and then got the second one and got paranoid. lol
 
YZFoxxy said:
good to know... one of my friends sold his bike and got the first letter and threw it out and then got the second one and got paranoid. lol
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I threw away my first one. I threw away my second one. They're just checking if you've changed your mind on the value you wrote down for your bike. It's a non-issue from what I understand.
 
they will ask for a bill of sale, acting like it is needed but its not. Just say you dont have it, then theyll ask you how much you got it for and you pay taxes on what you say.
Also I would tell the seller the amount you told the ministry, and let them know they may follow up.
 
YZFoxxy said:
Maybe they changed the policy but when i transferred my brothers bike to my name 3 years ago i didn't have to buy... I just had to sign the paperwork saying he was family and he was gifting it to me. Like i said before I think it just depends on the agent the offices are privately owned and they all train their staff in different ways.
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Yup they changed it. Siblings can now gift vehicles to each other tax free.
 
Jonnie said:
I threw away my first one. I threw away my second one. They're just checking if you've changed your mind on the value you wrote down for your bike. It's a non-issue from what I understand.
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good to know! :)
 
AF4iK said:
Yup they changed it. Siblings can now gift vehicles to each other tax free.
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A used anything should be tax free anyways, the government is just a thief.
 
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