Automotive

Importing car from US as a gift

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  • Mar 19th, 2011 4:35 pm
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Newbie
Aug 15, 2007
9 posts

Importing car from US as a gift

My Father-in-law in the US is giving us his 2006 Odessey as a gift and is driving it across. I've looked into the process of importing it but the GST and PST is working out to like $3000.

Is there anyway to avoid the GST/PST? He is giving it to us a a gift so there is no sale.. why do I have to pay taxes then?

Anyone have any insight?
8 replies
Deal Addict
Dec 26, 2006
2884 posts
29 upvotes
You have to pay taxes because the "transaction" (the 'gift giving') is not an arms-length transaction as you are close relatives. There would be a big loophole if this were allowed, so it's not.

As such a fair value has not been assessed, so the value will be determined by the Canadian Red Book, and any duty (as mentioned where was it made) and GST will be payed at the border.
Jr. Member
Oct 20, 2008
131 posts
4 upvotes
Burnaby
Hi
Ebola wrote:
Apr 1st, 2009 4:49 pm
You have to pay taxes because the "transaction" (the 'gift giving') is not an arms-length transaction as you are close relatives. There would be a big loophole if this were allowed, so it's not.

As such a fair value has not been assessed, so the value will be determined by the Canadian Red Book, and any duty (as mentioned where was it made) and GST will be payed at the border.
Also don't forget that the F/law has to export the car: http://tinyurl.com/6c4d67 and fax the title to the export office 72 hours before. Then the car has to be imported www.riv.ca

PMM
Deal Expert
User avatar
Dec 1, 2003
18575 posts
503 upvotes
Montreal
It doesn't matter if he sold you the car for $10. You will still pay taxes on the actual used value of the vehicle, and not what you paid or didn't pay. That value will be determined by the MTO.
Deal Addict
Oct 26, 2008
4740 posts
744 upvotes
BC
All provinces allow for a PST exemption for vehicles that are bona fide gifts from family.

Ontario is no different from any other province.
There does not appear to be any requirement for the gift-giver to be a Canadian citizen, but obviously the import requirements for the vehicle have to be met whatever.

From "Buying and Selling a Used Vehicle in Ontario":


You do not have to pay retail sales tax if:

* You are a qualifying Diplomat or Status Indian. You can complete a transfer by showing your identity card.
* You receive a vehicle as a gift from a close family member, such as:
o Spouse
o Parent or step-parent
o Grand-parent
o Son or step-son
o Daughter or step-daughter
o Grandson or granddaughter
o Step-grandson or Step-granddaughter
o Son-in-law
o Daughter-in-law
o Father-in-law
o Mother-in-law

Note: Only one tax-free transfer per vehicle is allowed every 12 months within your close family.

For some transfers, such as gifts between close family members (describe above), are sales tax exempt if a Sworn Statement for a Family Gift of a Used Motor Vehicle in the Province of Ontario is provided when registering your vehicle at a ServiceOntario Driver and Vehicle Licence Issuing Office.
Deal Addict
Dec 26, 2006
2884 posts
29 upvotes
PMM1 wrote:
Apr 1st, 2009 11:07 pm
Hi



Also don't forget that the F/law has to export the car: http://tinyurl.com/6c4d67 and fax the title to the export office 72 hours before. Then the car has to be imported www.riv.ca

PMM
Of course, true. A US law, so comply or don't at your own discretion. There's some pretty steep fines if you ever do go back to the US and it's discovered you never exported the vehicle.

CBSA will import the vehicle without the US export stamp if you want.


najibs wrote:
Apr 1st, 2009 11:18 pm
It doesn't matter if he sold you the car for $10. You will still pay taxes on the actual used value of the vehicle, and not what you paid or didn't pay. That value will be determined by the MTO.
The value will be determined by CBSA at the POE. The MTO generally uses that value for any PST they charge on registry.
macnut wrote:
Apr 1st, 2009 11:44 pm
All provinces allow for a PST exemption for vehicles that are bona fide gifts from family.

Ontario is no different from any other province.
There does not appear to be any requirement for the gift-giver to be a Canadian citizen, but obviously the import requirements for the vehicle have to be met whatever.

From "Buying and Selling a Used Vehicle in Ontario":


You do not have to pay retail sales tax if:

* You are a qualifying Diplomat or Status Indian. You can complete a transfer by showing your identity card.
* You receive a vehicle as a gift from a close family member, such as:
o Spouse
o Parent or step-parent
o Grand-parent
o Son or step-son
o Daughter or step-daughter
o Grandson or granddaughter
o Step-grandson or Step-granddaughter
o Son-in-law
o Daughter-in-law
o Father-in-law
o Mother-in-law

Note: Only one tax-free transfer per vehicle is allowed every 12 months within your close family.

For some transfers, such as gifts between close family members (describe above), are sales tax exempt if a Sworn Statement for a Family Gift of a Used Motor Vehicle in the Province of Ontario is provided when registering your vehicle at a ServiceOntario Driver and Vehicle Licence Issuing Office.
Bonus for the OP.

Like I said, no such exemption in place at the federali level for CBSA importing vehicles (GST and maybe duty). A fair value will be assessed as mentioned because of the familial relation.
Sr. Member
User avatar
Apr 21, 2004
816 posts
43 upvotes
Pickering
You don't have to pay GST on private sale.

http://www.mto.gov.on.ca/english/dandv/ ... used.shtml
Note: if you are buying a vehicle from a licensed motor vehicle dealer, you must pay the Retail Sales Tax and the Goods and Services Tax to the dealer. If you are buying a vehicle privately, you are not required to pay Goods and Services Tax.
You don't have to pay PST on a family gift as stated previously.

You will have to pay duty if it is manufactured outside North America as stated before.

I have received and transferred ownership of cars through the "gift" process but for Canadian cars. You need to have Emissions and Safety Certs for the car.

I'm not sure how it works with US gifted cars.

Contact the MTO, don't rely on the misinformation posted on here from people who haven't gone through your exact situation.
Questions? Call ServiceOntario's Driver and Vehicle Contact Centre:
Toronto Area: 416-235-2999
Toll Free: 1-800-387-3445 (Canada-wide)
Unless people have actually gone through this process (which is possible, but rare), that is your best bet.
Deal Addict
Dec 26, 2006
2884 posts
29 upvotes
There is no way around paying the GST and RIV fee. The vehicle has to be imported before the MTO will let you register it to an Ontario resident.

And as i said before, it doesnt matter that it's being gifted to you, the transaction is not an arms length one and as such a fair value will be assessed.
Newbie
Nov 21, 2010
11 posts
merchy10 wrote:
Apr 1st, 2009 3:26 pm
My Father-in-law in the US is giving us his 2006 Odessey as a gift and is driving it across. I've looked into the process of importing it but the GST and PST is working out to like $3000.

Is there anyway to avoid the GST/PST? He is giving it to us a a gift so there is no sale.. why do I have to pay taxes then?

Anyone have any insight?
Hi,
Do you have any procedure to import the gifted car ?
my brother in US want to gift me his car, and i want to import into mississauga.

Any help would be great.
Thanks, in advanc.

Nilesh
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