How to Gift A Car In Ontario? - Step by Step Guide

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How to Gift A Car In Ontario? - Step by Step Guide

Posted on November 29, 2024

Giving a car is a great way to donate to someone you know if you are in Ontario, or if you want to amaze your child with a newer, reliable car. The steps are not that hard unless you don't follow along with them. This will be a guide on how to buy a car in Ontario and make sure you'll have all the details you'd need for an easy transition.

 

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How to Gift a Car in Ontario? - Step-by-Step Guide

 

Step 1: Condition the Vehicle

Well, ensure that the car being given to someone is in good working condition.

• Clean the car: Always make sure it is well washed, both inside and outside. This makes the car look nice and shows one that you care for.
• Look for Maintenance Problems: Fix any minor repairs or servicing tasks so that the vehicle in the province runs fine.

 

Step 2: Gather Necessary Documents

You’ll need specific documents to complete the gifting process, including a sworn statement for a family.

• Vehicle Ownership Permit: This is essential for proving ownership of the used motor vehicle. You’ll need to sign this document over to the recipient.
• Safety Standards Certificate: If you're gifting the car to someone other than your spouse, you'll need this certificate, which verifies that the vehicle meets safety requirements.
• Sworn Statement for Family Gift: This form must be signed by both you and the recipient in front of a notary public or commissioner of oaths. It confirms that the car is a gift and identifies the recipient as an eligible family member, as stated in the sworn statement for a family gift.

 

Step 3: Complete the Transfer of Ownership

To officially transfer ownership:

1. Sign Over the Vehicle Ownership Permit: On the back of this permit, fill out the section for transferring ownership and sign it.
2. Provide All Documents: Hand over all necessary documents, including the ownership permit and any certificates required.
3. Remove License Plates: In Ontario, license plates are tied to the owner, not the vehicle. Remove your plates before handing over the car.

 

Step 4: Notify ServiceOntario

After transferring ownership:

• Visit ServiceOntario: Both you and the recipient should go together to a ServiceOntario location to finalize the transfer. Bring all necessary documents, including proof of insurance in the recipient's name, to facilitate the family gift of a used motor vehicle.
• Submit Required Forms: Present all forms and documents, including the plate transfer declaration, to complete the transfer process.

 

Step 5: Tax Implications

Gifting a car has specific tax benefits:

• No Retail Sales Tax (RST): When gifting a vehicle to an eligible family member (like a spouse, child, or parent), you typically do not have to pay RST. However, if you gift it to someone outside this circle (like a cousin), taxes may apply based on the vehicle's value.

 

Which Documents Are Required to Gift a Car in Ontario?

To ensure a smooth gifting process, have the following documents ready:

1. Vehicle Ownership Permit: Both the front and back portions need to be completed.
2. Safety Standards Certificate: Proof that the car meets Ontario’s safety requirements.
3. Drive Clean Certificate: If applicable, ensure the motor vehicle in the province passes emissions tests.
4. Gift Declaration Form for a family gift of a used motor vehicle: Only needed for family member exemptions.
5. Bill of Sale: While optional, this document can clarify the gift’s terms.

 

Also Read: How to Register a Used Car in Ontario? - Step by Step Guide

 

Do You Pay Taxes When Gifting a Car in Ontario?

Generally, when gifting a car to an eligible family member in Ontario, you do not pay Retail Sales Tax (RST). This tax exemption applies if you're transferring ownership within close family ties in the province of Ontario, such as:

• Spouse
• Child
• Parent
• Sibling
• Grandparent

If you're gifting to someone outside these relationships (like cousins or friends), RST will apply based on the vehicle's value at transfer in the province of Ontario.

 

Conclusion

Give the keys to a car in Ontario to help your loved ones find dependents for transportation around. Your preparation of a vehicle, getting all documentation in place, transfer at ServiceOntario, and knowing about taxes will determine if the whole process, whether to you or the beneficiary, is smooth and pleasant.

 

FAQ's

1. Can you gift someone a car?

Yes, you can gift someone a car in Ontario. However, you must follow the proper steps to transfer ownership, notify ServiceOntario and handle any taxes or exemptions.

 

2. Should You Sell or Gift a Car to a Family Member?

Gifting a car to a family member is often better because they may qualify for a Retail Sales Tax exemption, saving money on the transfer. Selling is only ideal if the recipient cannot qualify as an immediate family member, as outlined in the statement for a family gift.

 

3. How much does it cost to transfer ownership of a car to a friend?

For non-family members, the cost includes the transfer fee (around $32) and Retail Sales Tax based on the vehicle’s market value.