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Private sale question
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11-01-2012, 08:13 PM | #1 |
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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, 08:55 PM | #3 | |
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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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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, 08:13 AM | #8 |
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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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11-02-2012, 10:59 AM | #11 |
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11-02-2012, 11:07 AM | #12 |
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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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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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No need to get your panties in a bunch. |
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11-02-2012, 11:30 AM | #15 | |
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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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Thanks for the heads up. |
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11-02-2012, 11:51 AM | #17 | |
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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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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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