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BMW 3-Series (E90 E92) Forum > BMW E90/E92/E93 3-series General Forums > Regional Forums > Canada > Used Car Tax in Ontario (private sale)



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      10-02-2012, 12:43 PM   #1
e9012345
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Used Car Tax in Ontario (private sale)

Hi,

I'm not very familiar with buying/selling vehicles in Ontario. I know I just need the bill of sale which is at the back of the UVIP print out you get online and sign over the ownership to the new owner and vice versa for buying and selling in Ontario.

But what about tax? What is to stop me from declaring a $10 tax on a $50,000 cash deal and say it was a gift?

Thanks for any feedback!
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      10-02-2012, 12:56 PM   #2
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Quote:
Originally Posted by e9012345 View Post
Hi,

I'm not very familiar with buying/selling vehicles in Ontario. I know I just need the bill of sale which is at the back of the UVIP print out you get online and sign over the ownership to the new owner and vice versa for buying and selling in Ontario.

But what about tax? What is to stop me from declaring a $10 tax on a $50,000 cash deal and say it was a gift?

Thanks for any feedback!
The harmonized sale tax (HST 13%) is charged based on black book value.

Gifting a vehicle for a dollar was abolished some time ago, I do believe that you can gift one vehicle a year to a family member. Whatís required to prove the family relation, Iím not sure.
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      10-02-2012, 12:57 PM   #3
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Quote:
Originally Posted by e9012345 View Post
Hi,

I'm not very familiar with buying/selling vehicles in Ontario. I know I just need the bill of sale which is at the back of the UVIP print out you get online and sign over the ownership to the new owner and vice versa for buying and selling in Ontario.

But what about tax? What is to stop me from declaring a $10 tax on a $50,000 cash deal and say it was a gift?

Thanks for any feedback!
In Quebec, they will rely on the average values, to charge the tax if selling price is too low for cars under 8 yrs I believe.
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      10-02-2012, 01:16 PM   #4
e9012345
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Quote:
Originally Posted by AGO 530 View Post
The harmonized sale tax (HST 13%) is charged based on black book value.

Gifting a vehicle for a dollar was abolished some time ago, I do believe that you can gift one vehicle a year to a family member. Whatís required to prove the family relation, Iím not sure.
Where would all this take place? So once I have the car myself - how long do I have to wait before paying the tax on it and do I just got to any DMV office?

Is it here that they will determine the tax on the car? What if I say I bought it for 40K but I paid 50K and the BB value is 30K. Do they check the value every time you go in?
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      10-02-2012, 02:41 PM   #5
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Originally Posted by e9012345 View Post
Where would all this take place? So once I have the car myself - how long do I have to wait before paying the tax on it and do I just got to any DMV office?

Is it here that they will determine the tax on the car? What if I say I bought it for 40K but I paid 50K and the BB value is 30K. Do they check the value every time you go in?
Any MTO driver licensing location will do this. You will need a bill of sale and the ownership slip. You will have to pay the HST at the time of transfer (original owner on green slip to your name).
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      10-03-2012, 09:02 PM   #6
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I have seen people show a bill of sale and as long as the value that you paid for is reasonable I have seen them at the DMV just take that value and not look up the black book price.

You can gift one vehicle per year to a family member and I believe as long as you live at the same address that is good enough. It was for me just showing drivers license.
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      10-28-2013, 01:16 PM   #7
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Question re First Lieutenant's comment

Hi, i'm in Toronto and just bought at 330i (2006) manual, monaco blue on tan interior with 138,000 kms. I paid $12,500 for the car, but I want to declare it for much lower because I don't want to pay alot of tax. Could i get away with declaring a $5000 purchase price? The seller is fine with me doing this. Thanks for the advice.
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      10-28-2013, 01:25 PM   #8
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In ontario, you pay tax based on the book value or the sale value (whichever is higher). It states this on the UVIP provided when you bought the car. There should be a value that is somewhere in that package on how much tax you have to pay and you pay it at a service ontario location.
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      10-28-2013, 01:44 PM   #9
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Question re First Lieutenant's comment

Thanks for the reply PJ. I get that, but i'm wondering if anyone has any experiences that I can hear about. One person told me that for BMW they don't have a wholesale value, so they go by only the bill of sale.

Also, the seller never bought (or gave me) a Used Vehicle Information Package. She transferred jobs at Amgen to Los Angeles and didn't have any time. Just gave me the ownership and the car (after I did a pre-purchase inspection of course). I fully trust the seller though, as she's been my sister's best friend for over 20 years. I hope the Driver's resgistry of motor vehicles are okay with me not having this package - it's only $20 so I hope they would just let me buy it myself.

Thanks,
Don.
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      10-28-2013, 02:10 PM   #10
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Quote:
Originally Posted by DonTO View Post
Thanks for the reply PJ. I get that, but i'm wondering if anyone has any experiences that I can hear about. One person told me that for BMW they don't have a wholesale value, so they go by only the bill of sale.

Also, the seller never bought (or gave me) a Used Vehicle Information Package. She transferred jobs at Amgen to Los Angeles and didn't have any time. Just gave me the ownership and the car (after I did a pre-purchase inspection of course). I fully trust the seller though, as she's been my sister's best friend for over 20 years. I hope the Driver's resgistry of motor vehicles are okay with me not having this package - it's only $20 so I hope they would just let me buy it myself.

Thanks,
Don.
Yup, anyone can buy the uvip.
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      10-28-2013, 04:47 PM   #11
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RST is calcuated based on ...

http://www.mto.gov.on.ca/english/dan...d.shtml#retail

Not up to you to under declare any amount you want. If this exists, then everyone is going to declare their purchase for $1000 car value ... per se


Quote:
Originally Posted by DonTO View Post
Thanks for the reply PJ. I get that, but i'm wondering if anyone has any experiences that I can hear about. One person told me that for BMW they don't have a wholesale value, so they go by only the bill of sale.

Also, the seller never bought (or gave me) a Used Vehicle Information Package. She transferred jobs at Amgen to Los Angeles and didn't have any time. Just gave me the ownership and the car (after I did a pre-purchase inspection of course). I fully trust the seller though, as she's been my sister's best friend for over 20 years. I hope the Driver's resgistry of motor vehicles are okay with me not having this package - it's only $20 so I hope they would just let me buy it myself.

Thanks,
Don.
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      10-31-2013, 09:18 PM   #12
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if you go to the mto and they try to charge you full value for you car, you can have your car appraised. most of the guys who do it will put a reasonable believable value on your vehicle. so you save a on tax....


i had it done this weekend for my winter beater. i have 2003 nissan sentra spec v 220 kms, bought it off my friend for 1000 bucks(needed a bit of work).....went to the mto I declared 750 dollars, the girl did not believe me even with a bill of sale signed by my friend. said she is charging me tax on 2500.00(retail value) .....she said the only way to reduce tax is to have he vehicle appraised.

so i did, and I was honest with him. told him the whole story. He said the lowest he can set the value with out getting flagged is for wholesale value minus a few dollars which he did and set it to 800.00. he told me him self unless i am a wholesaler, the mto will never charge me wholesale taxes.

if you dont want to pay to have it appraised (costs about 40.00) just declare a reasonable value to begin with.

most of the people at the mto are not fools, and lets be honest if the true market value of your vehicle is 25k, who would really sell it to you for 10k...this price to would be way below wholesale value

Last edited by arejay; 10-31-2013 at 09:46 PM.
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      10-31-2013, 09:28 PM   #13
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Quote:
Originally Posted by DonTO View Post
Thanks for the reply PJ. I get that, but i'm wondering if anyone has any experiences that I can hear about. One person told me that for BMW they don't have a wholesale value, so they go by only the bill of sale.

this is not true, you have to ask yourself why would BMW out of all the manufactures not have a wholesale value......every vehicle has a wholesale value.

the mto uses retail market value to charge you tax on private sales. If you try to sell them you got "deal" of the century for you car....they will charge you full pop for trying to pull a fast one......Im sure the people at the MTO have heard every "deal" in the world.
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      10-31-2013, 11:13 PM   #14
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gift to a friend don't work now, you still would have to pay 12-13% tax based on the book value.
If you declare/selling too low compare to market value, they will ask/call you why you sold your car so cheap and make buyer pay the tax he deserve based on the book value. BS huh
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      11-10-2013, 01:49 PM   #15
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paying tax on a used car, is not right. The taxes were already paid on car when new, and gov't should not allow themselves to collect taxes again on car especially when sold privately.

I'm fortunate that I bought my car from USA privately, and imported car, and the value documented by Canada Customs is what was on the deed of sale, and the provincial *has* to use it, if it was accepted by Customs Canada.

Good luck!
Sergio

Last edited by Sergio; 11-10-2013 at 01:58 PM.
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      11-10-2013, 06:22 PM   #16
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Absolutely agree - SK has not used car sales tax.. loved that when I lived there. Moved back to NS and you pay tax on a vehicle -every- time it's sold. Pure robbery of the tax payer.
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      11-10-2013, 06:25 PM   #17
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I am on my 3rd pre-owned BMW and not one of them came with a wholesale value on the UVIP, so the ministry went by the bill of sale......
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      12-14-2013, 09:38 AM   #18
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In order to buy a used car in Ontario you are required to purchased a used car package at the license office. More than likely there will be a black book value in the package stating what the car is value at (for example it will say something like 2500$ to 4500$) so you can pick the lower value and pay tax on that. You could also pick the lower value and write down you paid a little less ( somewhat close to that value) and you could probably get away.

If you are lucky the used car package will not give a value on that you purchased. I purchased two cars in the last 2 years and my used car package had not value in it.

According to the service office at the counter , its a 60-40 that you may not get a value in the car used package. You could write whatever you want if that is the case. However you have to be reasonable , people are not that stupid , it you say bought a 2012 bmw for 10 000 , it just looks suspicious, however if you said you bought it for 20 00 they may let it go.

I just purchased a 2011 bmw 328 XI with 15 000 kilometers and premium package for 27 000 . I went to the service office and bought a used car package which had not price in it. I wrote down 22 000 and the lady at the office did not say anything , not a single question , but I went at the end of the day and she already looked tired. I could've probably got away with less

I find it better to go at the end of the day , close to closing time because most of the employees at the service office probably want to go home and they do not want to deal with you ...
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