What tax is payable on a private trade? | GTAMotorcycle.com

What tax is payable on a private trade?

C

carman

Member
Forum Sponsor
If I make a deal to trade my bike for someone elses' bike, is HST due only on the difference in value? and if it's an even trade then no tax? Or does the MTO still want their cut?
 
It would be easier to present the bill of sale as if you paid for it. Declare a low amount and voila.
If you trade, they may ask you for an appraisal and then you'd pay tax on that, plus the cost of the appraisal.
If it's an older bike, write down you paid $1 for it and be done with it. There's no black book value on bikes.
 
Just claim the bikes as $1 and both of you will receive a letter in the mail stating what you 'sold' it for. And I remember someone posting that they don't do appraisals. Someone confirm this.
 
DemonPig said:
It would be easier to present the bill of sale as if you paid for it. Declare a low amount and voila.
If you trade, they may ask you for an appraisal and then you'd pay tax on that, plus the cost of the appraisal.
If it's an older bike, write down you paid $1 for it and be done with it. There's no black book value on bikes.
Click to expand...

The OP asked a specific legal question. If he is trading bikes of similar value and there is no reason to lie why not just answer his question. Putting a ridiculously low price on the bikes is asking for trouble.

If enough price scamming goes on the govies could introduce mandatory appraisals and then we would all be bitching about that. Shaving a few points maybe but a dollar????
 
I had a question a about giving a bike away and asked at the local ministry office.
 
If you want to get technical, I think you pay tax on the value of goods exchanged which includes cash and any other items with an associated value.

If you and the seller agree your bike is worth 5 grand, and you add another grand on top of that, you did not buy the bike for $1000, but rather, the agreed value of cash and other goods exchanged was $6000. You should pay tax on $6000.
 
carman said:
If I make a deal to trade my bike for someone elses' bike, is HST due only on the difference in value? and if it's an even trade then no tax? Or does the MTO still want their cut?
Click to expand...

MTO does not get any of the tax money they collect on behalf of the government. Just like the police forces do not get any of the fine money.
 
nobbie48 said:
The OP asked a specific legal question. If he is trading bikes of similar value and there is no reason to lie why not just answer his question. Putting a ridiculously low price on the bikes is asking for trouble.

If enough price scamming goes on the govies could introduce mandatory appraisals and then we would all be bitching about that. Shaving a few points maybe but a dollar????
Click to expand...

You must be new to this world.
 
Ok, I went in and talked with somone at the licensing office.

For reference:

Private Transaction:
Bikes 3 years and newer have a value assigned by the ministry. That value is printed on the Used Vehicle Information Package (UVIP), whether you trade bikes or purchase doesn't matter. You pay the tax based on the value of the bike as specified in the UVIP.

If the bike you are buying or trading for is older than three years then the ministry considers it to have a value of $0. If you trade bikes, or buy a bike that is older than 3 years they are perfectly ok with you specifying the value of the bike as $1, and you pay tax on one dollar.

Dealer Transaction:
All bikes purchased through a dealer are subject to tax. If you trade in a bike at a dealer then only the difference in value between the bike being traded in and the one being purchased is subject to tax (assuming the bike you trade in is worth less than the one you are buying).
 
News to me, when did it change? Let us know how it goes......I have a feeling a different person will give you a different answer.
 
Sorry but the three year thing is not true. My bike is a 99 and has a value on the UVIP.

No matter what on a trade you will pay tax on the MTO's value. The only time you can get a break is when you give a gift to a family member or if you pay for a lower appraisal. Dealer trade ins don't get taxes reduced by the trade in. Only businesses get the HST exemption for taxes paid out bs taxes received.
 
Adamant said:
Sorry but the three year thing is not true. My bike is a 99 and has a value on the UVIP.

No matter what on a trade you will pay tax on the MTO's value. The only time you can get a break is when you give a gift to a family member or if you pay for a lower appraisal. Dealer trade ins don't get taxes reduced by the trade in. Only businesses get the HST exemption for taxes paid out bs taxes received.
Click to expand...

You only pay tax on difference between the new bike and your trade in at a dealer. Private sales there are no kind of trades as far as taxes and the MTO are concerned.
 
carman said:
Ok, I went in and talked with somone at the licensing office.

For reference:

Private Transaction:
Bikes 3 years and newer have a value assigned by the ministry. That value is printed on the Used Vehicle Information Package (UVIP), whether you trade bikes or purchase doesn't matter. You pay the tax based on the value of the bike as specified in the UVIP.

If the bike you are buying or trading for is older than three years then the ministry considers it to have a value of $0. If you trade bikes, or buy a bike that is older than 3 years they are perfectly ok with you specifying the value of the bike as $1, and you pay tax on one dollar.

Dealer Transaction:
All bikes purchased through a dealer are subject to tax. If you trade in a bike at a dealer then only the difference in value between the bike being traded in and the one being purchased is subject to tax (assuming the bike you trade in is worth less than the one you are buying).
Click to expand...

Can anyone verify this?
 
Off topic: I don't understand why we have to pay tax on a vehicle/item that was already taxed. E.G I paid 100% of the tax for my bike when i got it new so it should be tax free when it comes to sell it as the tax has already been paid... Stupid system.
 
Any Motor Vehicle including bikes that are 20+ years old have to have an appraisal to set the value for the HST. As for sushi's off topic - the gov't is taxing the transaction - the subject matter, whether it is potatoes you grew or a used m/c, doesn't really matter except to have a taxable value assigned to it.
 
Well The last two privet sale bikes i bought was an 83 midnight maxim and i paid the taxes on purchase price.Then there was the 07 cbr 125r last November. paid 1000 for it and was taxed on 1000.They don't know if it was dropped,crashed or show room new and didnt seem to care the OD was at 512km.So either something has changed or carman sounds about right.Which is it???????????
 
Last edited:
Oh and the 07 c50 was 6500 at the dealer and I paid tax on 6500 as well And I know for a fact you only pay the difference on a trade as i was about to sign a deal in a v-rod at the dealer last fall for the c50 plus what carman says sounds real familiar and all deal were in the last 3 years.I think it has to sound half *** reasonable and yes i got a letter from the gov, photo copied the receipt and sent it in on the cbr in the above post.I can see trade get appraised though.People do it all the time on kijiji
 
Last edited:
Adamant said:
Sorry but the three year thing is not true. My bike is a 99 and has a value on the UVIP.

No matter what on a trade you will pay tax on the MTO's value. The only time you can get a break is when you give a gift to a family member or if you pay for a lower appraisal. Dealer trade ins don't get taxes reduced by the trade in. Only businesses get the HST exemption for taxes paid out bs taxes received.
Click to expand...

There was no value on the UVIP when I sold you the bike. When did this change?
Forum Sponsor
 
You must log in or register to reply here.

Back
Top Bottom