Transfer family vehicle to another family member

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cybernation

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Question,
my father wants to sell his car to my brother and we are wondering if they can do this tax free?

i know you can gift it but I'm not sure if my father will owe taxes if my brother pays cash for it.. Cost is 25k. Has anybody done this before?

tx
 
Parent to child and Husband to wife can be gifted free but Sibling to sibling or any other bloodline relation is taxed and they have to pay for registration.
 
Answer: http://www.mto.gov.on.ca/english/dandv/vehicle/used.shtml

[h=3]Tax exemption[/h]You do not have to pay retail sales tax if:

  • You are a qualifying Diplomat or Status Indian. You can complete a transfer by showing your identity card.
  • You receive a vehicle as a gift from a close family member, such as:
    • Spouse
    • Parent or step-parent
    • Grand-parent
    • Son or step-son
    • Daughter or step-daughter
    • Grandson or granddaughter
    • Step-grandson or Step-granddaughter
    • Son-in-law
    • Daughter-in-law
    • Father-in-law
    • Mother-in-law
    • Brother or Sister
    • Half Siblings (siblings with a common parent)
    • Adopted Siblings (siblings with a common parent by way of adoption)
    • Siblings-in-law (siblings of a spouse of spouse of a sibling)
Note: Only one tax-free transfer per vehicle is allowed every 12 months within your close family.
For some transfers, such as gifts between close family members (describe above), are sales tax exempt if a Sworn Statement for a Family Gift of a Used Motor Vehicle in the Province of Ontario is provided when registering your vehicle at a ServiceOntario Driver and Vehicle Licence Issuing Office.
Click to expand...

[h=3]Safety standards certificate[/h]To register a motor vehicle as fit, you must have a safety standards certificate. A safety standards certificate that is issued outside Ontario is not acceptable. An authorized mechanic at a government approved Motor Vehicle Inspection Station inspects the vehicle, for a fee, and issues a signed certificate if the vehicle passes inspection. The certificate is valid for 36 days from the date of the inspection. The certificate is not a warranty or guarantee on the general condition of the vehicle.
You will be asked to show this certificate when you:

  • Register a rebuilt motor vehicle
  • Transfer a used motor vehicle to a new owner as fit
  • Certain transfers, such as between spouses do not require a Safety Standards Certificate. However, transfers between parent and child and vice versa require a Safety Standards Certificate. For further information on vehicle transfer Safety Standards Certificate exemptions, please call ServiceOntario's Driver and Vehicle Contact Centre at (416) 235- 2999, or toll free (Canada-Wide) 1-800-387-3445
  • Register a motor vehicle as fit in Ontario that was previously registered in another province or country
  • Change the status of a vehicle from unfit to fit
Click to expand...
 
cybernation said:
Question,
my father wants to sell his car to my brother and we are wondering if they can do this tax free?

i know you can gift it but I'm not sure if my father will owe taxes if my brother pays cash for it.. Cost is 25k. Has anybody done this before?

tx
Click to expand...

Just make sure that the car is a gift and you should be in the clear (assuming that your brother is his son, if the relationship is more complicated than that, I have no idea). If your brother wants to give your father a gift of 25K cash, that's also not a problem.

Your father has to sign an affidavit that it is a gift, you cannot avoid tax if the car is sold to your brother.

Excerpt from affidavit.
This Used Vehicle was acquired by the said (Name of Owner / Recipient) on (Date)
from (Name of Donor) as a gift for no consideration, and has not been transferred on a tax-exempt basis in Ontario as a gift within the twelve-month period immediately preceding the acquisition.
 
I did this last year, gave my mom a car.

No tax, you have to pay like $10 dollars or something like that. But the car won't be able to be transferred back for 12 months.

Easy process and only took 10 min.
 
Where it says "for no consideration" is confusing us.. Does that mean no money?

Can we just say I owed him money from before?


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cybernation said:
Question,
my father wants to sell his car to my brother and we are wondering if they can do this tax free?

i know you can gift it but I'm not sure if my father will owe taxes if my brother pays cash for it.. Cost is 25k. Has anybody done this before?

tx
Click to expand...

Your father wants to sell a car to your brother.
Is it really a gift? No, you are talking of exchanging money for the car - that is a sale transaction, not a gift. Why is your brother paying cash for it, if it is really a gift?

Anyways, "no consideration" means no money and no exchange of any other item of value, or any promise of future performance, as a trade for the car.

The answers are already posted above. Just make sure it is a gift, and you do not pay taxes. See post #5 by GreyGhost
 
Last edited:
XenoVibe said:
Parent to child and Husband to wife can be gifted free but Sibling to sibling or any other bloodline relation is taxed and they have to pay for registration.
Click to expand...

say what now?
 
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