Gifting a Car in Ontario

Jul 19th, 2021 9:21 am

#1

yobb [OP]: Newbie; Oct 9, 2007; 18 posts; 5 upvotes

Jul 19th, 2021 9:21 am

My brother is buying out his leased company car for $8,000. (A third party is not allowed to buy it out).
I am then going to buy it from him for $8,000.

The wholesale value is $15,000 so I will have to pay $1,950 in tax.

Since technically I am buying the car from him, he's not giving the car to me, is there a way to gift the car legally in this situation to avoid paying the tax on the wholesale value?

Jul 19th, 2021 9:31 am

#2

CuriousJack: Deal Addict; Feb 17, 2015; 1154 posts; 1555 upvotes; 90.00° N, 135.00° W

Jul 19th, 2021 9:31 am

Since you are in Ontario, you may be allowed to transfer ownership of your vehicle to a family member without paying the sales tax.

Then on your brothers birthday gift him $8000 cash.

Jul 19th, 2021 10:25 am

#3

mxthor3: Deal Addict; Oct 1, 2015; 3013 posts; 4344 upvotes; Barrie, ON

Jul 19th, 2021 10:25 am

Go to Service Ontario, he gifts you the car, you gift him 8k on the way home via EMT. Simple stuff.

Jul 19th, 2021 10:33 am

#4

Guest032984237: Banned; Mar 7, 2007; 5347 posts; 3017 upvotes

Jul 19th, 2021 10:33 am

No tax.

We pay enough on cars, then they want more om used cars.

No tax, pay not tax.

______________________________

Jul 19th, 2021 2:26 pm

#5

derass: Deal Addict; Sep 8, 2017; 4650 posts; 4912 upvotes; GTA

Jul 19th, 2021 2:26 pm

Yes. Siblings are eligible to gift vehicles without sales tax in Ontario.

https://www.ontario.ca/page/transfer-ow ... ily-member

Jul 19th, 2021 2:30 pm

#6

VanillaDonut: Sr. Member; Jul 29, 2019; 860 posts; 727 upvotes

Jul 19th, 2021 2:30 pm

If you are in Ontario, you can follow the steps here to have your brother gift the car to you. https://www.ontario.ca/page/transfer-ow ... ily-member

Then you can send him the $8k afterwards.

Jul 21st, 2021 12:18 am

#7

michelb: Deal Fanatic; Jul 4, 2004; 7254 posts; 4298 upvotes; Ottawa

Jul 21st, 2021 12:18 am

Check with ServiceOntario but I believe your brother will likely have to register it in his name and pay taxes when he buys it out before he can gift it to you.

+2

Jul 21st, 2021 7:09 am

#8

mxthor3: Deal Addict; Oct 1, 2015; 3013 posts; 4344 upvotes; Barrie, ON

Jul 21st, 2021 7:09 am

michelb wrote: ↑ Check with ServiceOntario but I believe your brother will likely have to register it in his name and pay taxes when he buys it out before he can gift it to you.

Yup, can't gift a car unless you're the legal owner.

+1

Jul 21st, 2021 7:35 am

#9

notunknown: Member; Aug 18, 2013; 384 posts; 723 upvotes; Next door

Jul 21st, 2021 7:35 am

Are you 100% sure that you can't get the leasing company to sell it to you? It would make the whole thing a lot simpler.

Have you escalated the question and let them know you are the brother? I would keep trying that angle. Heck, the province let's you transfer without tax so why should they care?

+2

Jul 21st, 2021 9:38 am

#10

michelb: Deal Fanatic; Jul 4, 2004; 7254 posts; 4298 upvotes; Ottawa

Jul 21st, 2021 9:38 am

notunknown wrote: ↑ Are you 100% sure that you can't get the leasing company to sell it to you? It would make the whole thing a lot simpler.

Have you escalated the question and let them know you are the brother? I would keep trying that angle. Heck, the province let's you transfer without tax so why should they care?

That's a good point. Your brother should be able to transfer the lease to you and then you do the buy out. (I've done this for my father-in-law at the end of his Honda lease to someone else that wanted to buy it out).