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      11-01-2012, 08:13 PM   #1
flyer333
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Private sale question

Hey guys,

Do you guys know if you have to pay HST if it's just a private sale?

Thanks.
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      11-01-2012, 08:49 PM   #2
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Yes you do
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      11-01-2012, 08:55 PM   #3
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Quote:
Originally Posted by flyer333 View Post
Hey guys,

Do you guys know if you have to pay HST if it's just a private sale?

Thanks.
You don't pay taxes to the person selling, you are going to have to pay taxes when you register with vehicle with MTO.

Way around this:

You pay taxes on the sale price or blackbook value of the car (whichever is higher). BUT there is a form you can pick up at the MTO office that lets you get the car appraised and you pay taxes on the appraisal value of the car and not the sale price or blackbook value.

Here is what you can do:

1) Get the form from the DMV (its called appraisal form for used car sale)
2) If you know someone in the mechanic/appraisal business get them to write the appraisal value for around $5000 (make it a reasonable number. Don't get the appraisal made out for $20 thats ridiculous I'm sure you get my point)
3) On the form there is a section to list damaged parts so list:

-Water damage to engine
-turbo's need replacing
-wiring harness needs replacing
-SOLD AS IS

Make it believable. If your going to state water damage to engine, be consistent with the stuff that would need to be replaced in the event your car has water damage to the engine.

4) When you take the Bill of Sale and Title to the MTO office to register the car, hand them the appraisal and you pay the tax on the $5000 not the blackbook or sale price.

(I am assuming you are buying a BMW for $20,000 or more. Obviously if your buying a winter beater you picked up for a couple grand make the appraisal out for $300-400)

Last edited by shaginwagon13; 11-01-2012 at 09:05 PM.
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      11-01-2012, 09:56 PM   #4
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Wow thanks for the information! So the appraisal is basically telling them what damage or work is needed on the car? So the value of the car is therefore less? I guess the key point is on if I know any mechanics who would do that for me.
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      11-01-2012, 10:04 PM   #5
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Quote:
Originally Posted by flyer333 View Post
Wow thanks for the information! So the appraisal is basically telling them what damage or work is needed on the car? So the value of the car is therefore less? I guess the key point is on if I know any mechanics who would do that for me.
That is correct. The appraisal tells the MTO that the car needs works, and is sold as is and the blackbook value cannot be used to determine the appropriate value of your specific vehicle.

On a side note, the person you are buy the car from will have to go to the MTO office and print out a 'Sellers Package'. Basically two pieces of paper that state the VIN, car type, if there are any leins on the vehicle, etc. On the second page of that sellers package on the bottom is the Bill of Sale.

EDIT: The Sellers Package is what we have to do in Ontario before we sell a car. I see your from BC, so I am not sure if the seller has to get this from the MTO but regardless the process is still the same. If you need to get a Bill of Sale notarized by a lawyer out in BC do the same thing, make the Bill of Sale out to a couple hundred less than the appraisal value.

Make sure you write down the sale price within a couple hundred dollars of what you made the appraisal out for.

For example on the Bill of Sale state:

sold for $4300

On the Appraisal state:

Appraisal value: $4900

Do this, because you will pay tax on whichever is higher the number paid on the Bill of Sale or the Appraisal Value.

**Make sure the person you buy the car from surrenders the ownership (small greenish piece of paper), and signs the back in the appropriate fields or you will not be able to register the car**

Hope this helps. If you have any more questions feel free to ask and I know this process works 100% because I did it a couple weeks ago for my winter beater.

Last edited by shaginwagon13; 11-01-2012 at 10:10 PM.
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      11-02-2012, 06:41 AM   #6
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does he / she get insurance on the car for the real value of the car? or will he get this fake " appraise value?

I am not an insurance expert but your insurance broker will ask for the bill of sale and value of the car.
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      11-02-2012, 08:12 AM   #7
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the MTO doesn't have a value for the E90 yet.. so we were able to fill in the value of the car ourselves


and yes, you have to pay HST + plate/sticker fees on top
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      11-02-2012, 08:13 AM   #8
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Quote:
Originally Posted by demontwinz View Post
does he / she get insurance on the car for the real value of the car? or will he get this fake " appraise value?

I am not an insurance expert but your insurance broker will ask for the bill of sale and value of the car.
insurance broker would ask you for the price you bought the car for, but they didn't ask me for bill of sale or the value of the car.
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      11-02-2012, 09:32 AM   #9
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Quote:
Originally Posted by tomy12 View Post
insurance broker would ask you for the price you bought the car for, but they didn't ask me for bill of sale or the value of the car.
+1

So when you talk to your broker, you tell him/her what the car is really worth for full coverage.
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      11-02-2012, 10:47 AM   #10
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So you are suggesting committing fraud?
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      11-02-2012, 10:59 AM   #11
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So you are suggesting committing fraud?
I didn't say to tell the insurance company the car was overvalued. That would be fraud. I said to tell the insurance company how much the car is actually worth so you have coverage.
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      11-02-2012, 11:07 AM   #12
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Quote:
Originally Posted by shaginwagon13 View Post
I didn't say to tell the insurance company the car was overvalued. That would be fraud. I said to tell the insurance company how much the car is actually worth so you have coverage.
I think you need to re read your posts - I made no mention of insurance companies.
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      11-02-2012, 11:17 AM   #13
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Quote:
Originally Posted by Jaypod View Post
I think you need to re read your posts - I made no mention of insurance companies.
Please don't lecture me on the morals of saving some money from Revenue Canada. I was letting the OP know of a way to save some HST from his used vehicle purchase. Technically speaking, RCA already got their HST when the car was bought brand new. If you don't wanna use the ways I listed to save some money then don't, it doesn't really matter to me.
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      11-02-2012, 11:23 AM   #14
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Quote:
Originally Posted by shaginwagon13 View Post
Please don't lecture me on the morals of saving some money from Revenue Canada. I was letting the OP know of a way to save some HST from his used vehicle purchase. Technically speaking, RCA already got their HST when the car was bought brand new. If you don't wanna use the ways I listed to save some money then don't, it doesn't really matter to me.
What lecture? Asked a question, now you are referring to morals? what does this have to do with morals? Laws are laws and unfortunately you can't just ignore the ones you dont like. You can do what you like, I just wouldnt suggest it to others in a public forum. You are also asking someone to lie about the value of a car and make up problems with it.

No need to get your panties in a bunch.
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      11-02-2012, 11:30 AM   #15
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Quote:
Originally Posted by Jaypod View Post
What lecture? Asked a question, now you are referring to morals? what does this have to do with morals? Laws are laws and unfortunately you can't just ignore the ones you dont like. You can do what you like, I just wouldnt suggest it to others in a public forum. You are also asking someone to lie about the value of a car and make up problems with it.

No need to get your panties in a bunch.
You have threads that openly discuss street racing 'in Mexico', threads on driving impaired after the bar (both of which carry jail terms), and your gonna throw me out because I listed a few ways to save on HST of which Revenue Canada has already recieved their cut when the car was purchased brand new? Thats pretty funny.

Like I said, if you don't want to do it, then don't. I'm sure some member will appreciate the heads up.
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      11-02-2012, 11:32 AM   #16
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Quote:
Originally Posted by shaginwagon13 View Post
You have threads that openly discuss street racing 'in Mexico', threads on driving impaired after the bar (both of which carry jail terms), and your gonna throw me out because I listed a few ways to save on HST of which Revenue Canada has already recieved their cut when the car was purchased brand new? Thats pretty funny.

Like I said, if you don't want to do it, then don't. I'm sure some member will appreciate the heads up.
+1


Thanks for the heads up.
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      11-02-2012, 11:51 AM   #17
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Quote:
Originally Posted by shaginwagon13 View Post
You have threads that openly discuss street racing 'in Mexico', threads on driving impaired after the bar (both of which carry jail terms), and your gonna throw me out because I listed a few ways to save on HST of which Revenue Canada has already recieved their cut when the car was purchased brand new? Thats pretty funny.

Like I said, if you don't want to do it, then don't. I'm sure some member will appreciate the heads up.
Actually I dont have any threads like that, but yeah plenty of f@ktards do. I dont own the forum or control it's content. But I do enjoy asking a simple question and then watch someone get all defensive. So please carry on.

I really don't care what you do, just like stirring the pot from time to time, like I have done is some of those threads you mentioned. Thanks for the entertainment
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      11-02-2012, 11:59 AM   #18
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Quote:
Originally Posted by Jaypod View Post
Actually I dont have any threads like that, but yeah plenty of f@ktards do. I dont own the forum or control it's content. But I do enjoy asking a simple question and then watch someone get all defensive. So please carry on.

I really don't care what you do, just like stirring the pot from time to time, like I have done is some of those threads you mentioned. Thanks for the entertainment
No no I wasn't suggesting that you have threads like that. I'm speaking in generalities.
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      11-02-2012, 05:20 PM   #19
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Holy hell ppl relax....

I'm going to jump in here for insurance purposes.

#1. If your broker is not asking for the bill of sale then he's an idiot and not doing his job. This is required for claims purposes later to determine replacement cost or ACV (actual cash value)

#2. It doesn't matter what you paid for the car. Many people buy good cars for cheap and later have accidents only to receive more than what they paid.

#3. At the time of a loss, the insurer will likely use the ACV at the time of loss. If your vehicle was in good working condition and worth $30000, they will not pay $20000 just because that's what you paid.
A) you can say in the last year you spent several thousand to a privates habit fixing the car and getting it up to par.
B) if you have an accident literally days or weeks after the purchase of the lower bill of sale price, you will be SOL. Unless you have invoices of repair with clear indication of HST.

The above is not fraud unless you clearly are doing this for the purposes of benefitting from a claim. If you try to get a car for cheaper that's all fine and dandy.

Hope the above helps
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      11-02-2012, 07:51 PM   #20
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Quote:
Originally Posted by shaginwagon13 View Post
That is correct. The appraisal tells the MTO that the car needs works, and is sold as is and the blackbook value cannot be used to determine the appropriate value of your specific vehicle.

On a side note, the person you are buy the car from will have to go to the MTO office and print out a 'Sellers Package'. Basically two pieces of paper that state the VIN, car type, if there are any leins on the vehicle, etc. On the second page of that sellers package on the bottom is the Bill of Sale.

EDIT: The Sellers Package is what we have to do in Ontario before we sell a car. I see your from BC, so I am not sure if the seller has to get this from the MTO but regardless the process is still the same. If you need to get a Bill of Sale notarized by a lawyer out in BC do the same thing, make the Bill of Sale out to a couple hundred less than the appraisal value.

Make sure you write down the sale price within a couple hundred dollars of what you made the appraisal out for.

For example on the Bill of Sale state:

sold for $4300

On the Appraisal state:

Appraisal value: $4900

Do this, because you will pay tax on whichever is higher the number paid on the Bill of Sale or the Appraisal Value.

**Make sure the person you buy the car from surrenders the ownership (small greenish piece of paper), and signs the back in the appropriate fields or you will not be able to register the car**

Hope this helps. If you have any more questions feel free to ask and I know this process works 100% because I did it a couple weeks ago for my winter beater.
Interesting information, thanks for posting this!
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      11-02-2012, 08:12 PM   #21
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Interesting information, thanks for posting this!
No Problem
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