Automotive

Vehicle value for HST

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  • Jun 14th, 2016 5:20 pm
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[OP]
Member
Feb 24, 2013
359 posts
51 upvotes
Ontario

Vehicle value for HST

My son just purchased a 2008 Chrysler Aspen Limited for $5000. However, the used vehicle package states the wholesale value at something like $8000, which is apparently what the MOT would charge tax on. But he neither wants to, not can afford to pay extra HST on hard earned money he did not even spend. That would actually be fraud on the part of the government. So I looked this vehicle up on http://www.vmrcanada.com with the optional equipment and the mileage of 335,000 km and it comes in at just under $5000. Does anyone know if MOT would honour the receipt of calculate the value considering the mileage, or does he need to get the truck appraised to save gifting Wynne an extra $400?
28 replies
Deal Expert
Aug 22, 2011
35620 posts
21676 upvotes
Center of Universe
Velocrank wrote: My son just purchased a 2008 Chrysler Aspen Limited for $5000. However, the used vehicle package states the wholesale value at something like $8000, which is apparently what the MOT would charge tax on. But he neither wants to, not can afford to pay extra HST on hard earned money he did not even spend. That would actually be fraud on the part of the government. So I looked this vehicle up on http://www.vmrcanada.com with the optional equipment and the mileage of 335,000 km and it comes in at just under $5000. Does anyone know if MOT would honour the receipt of calculate the value considering the mileage, or does he need to get the truck appraised to save gifting Wynne an extra $400?
Present the receipt and see if they will accept it, otherwise an appraisal as you stated will be required.
Deal Addict
User avatar
Sep 4, 2007
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If your bill of sale isn't something ridiculous like $500 for a 5k car then they should have no problem accepting it
Sr. Member
Jan 11, 2009
556 posts
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Toronto
Velocrank wrote: My son just purchased a 2008 Chrysler Aspen Limited for $5000. However, the used vehicle package states the wholesale value at something like $8000, which is apparently what the MOT would charge tax on. But he neither wants to, not can afford to pay extra HST on hard earned money he did not even spend. That would actually be fraud on the part of the government. So I looked this vehicle up on http://www.vmrcanada.com with the optional equipment and the mileage of 335,000 km and it comes in at just under $5000. Does anyone know if MOT would honour the receipt of calculate the value considering the mileage, or does he need to get the truck appraised to save gifting Wynne an extra $400?
HST is going to be the least of his worries once he has to maintain and fix a Chrysler with 335K on it.
Newbie
Oct 3, 2015
54 posts
11 upvotes
Ontario
I just transferred ownership on a used car last week. They charged me the tax on the wholesale price. The seller had signed the receipt for what I paid for it, which was $600 less, but the MTO lady told me it didn't matter.
[OP]
Member
Feb 24, 2013
359 posts
51 upvotes
Ontario
I'm afraid it could be exactly what Graycern said because that's what the government website says. Apparently they don't consider mileage or condition at all, which is totally unfair because for this vehicle it can easily change the value by a factor of 2. So even if he has to pay $100 or $200 for an appraisal (and I have a friend in the old car biz who may even do it for free) it would still save him $200 or $300.

The most despicable thing about this HST thing is that if you sell a car and buy another one, the government makes money on both sales, but if you trade it in at a dealer, they only charge HST on the difference.

Oh, and xseanx , he researched this quite thoroughly and this truck is well-maintained, has new front end parts and it's a Hemi, so reliable and bulletproof. It will only be used to tow a travel trailer and occasional use by his wife.
Deal Addict
May 4, 2014
4751 posts
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Toronto, ON
vkizzle wrote: Present the receipt and see if they will accept it, otherwise an appraisal as you stated will be required.
The policies are clear, it is wholesale price or sale price whichever is higher. This is not Walmart, you can't just tell em you want to speak to the supervisor.
Deal Addict
May 4, 2014
4751 posts
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Toronto, ON
xseanx wrote: HST is going to be the least of his worries once he has to maintain and fix a Chrysler with 335K on it.
He can't afford $400 HST but he can afford to run a car that gobbles gas at single digit MPGs. I wish him well.

335k on a Chrysler.. LOL........ That mileage's not even a sure bet if it were a RFD fav beige Corolla.
[OP]
Member
Feb 24, 2013
359 posts
51 upvotes
Ontario
er34er34 wrote: The policies are clear, it is wholesale price or sale price whichever is higher. This is not Walmart, you can't just tell em you want to speak to the supervisor.
Ontario's policy is to make as much sales tax revenue as possible. No doubt their simplified formula based wholesale price, unless you paid more, but not if you paid less, stems from falsified low-ball receipts. You can't expect a license office clerk to rule on it. That's why they have the option of getting an appraisal if you paid less.

And if you bring up Walmart, say you bought a TV on sale at Walmart for $200 and the government thought it was worth $400, then according to this policy, they should be able to make you pay HST on $400.
Banned
Mar 11, 2016
2081 posts
866 upvotes
xseanx wrote: HST is going to be the least of his worries once he has to maintain and fix a Chrysler with 335K on it.
lol...they do not care...he will pay tax on purchase price
[OP]
Member
Feb 24, 2013
359 posts
51 upvotes
Ontario
er34er34 wrote: He can't afford $400 HST but he can afford to run a car that gobbles gas at single digit MPGs. I wish him well.

335k on a Chrysler.. LOL........ That mileage's not even a sure bet if it were a RFD fav beige Corolla.
You're getting way off topic here. I'm talking about whether you should be paying what amounts to 21% HST when you buy a vehicle for less than what the government says is the wholesale price.

After they scrapped their minivan, she needed a vehicle for occasional use and they needed a tow vehicle for a travel trailer they had just bought to be used once or twice a year. Yes, the 5.7 Hemi drinks 15 mpg (U.S.), same as the smaller 4.7 V8, but for the amount of use it will get, the gas mileage is irrelevant.
Deal Addict
Jul 30, 2015
2775 posts
1785 upvotes
Toronto, ON
Velocrank wrote: My son just purchased a 2008 Chrysler Aspen Limited for $5000. However, the used vehicle package states the wholesale value at something like $8000, which is apparently what the MOT would charge tax on. But he neither wants to, not can afford to pay extra HST on hard earned money he did not even spend. That would actually be fraud on the part of the government. So I looked this vehicle up on http://www.vmrcanada.com with the optional equipment and the mileage of 335,000 km and it comes in at just under $5000. Does anyone know if MOT would honour the receipt of calculate the value considering the mileage, or does he need to get the truck appraised to save gifting Wynne an extra $400?
MTO will charge at the higher of the two and for good reason. People are scammers, in fact, pretty much everyone on RFD will advice you to under invoice.
Deal Fanatic
Aug 29, 2011
6284 posts
3349 upvotes
Mississauga
canoek wrote: MTO will charge at the higher of the two and for good reason. People are scammers, in fact, pretty much everyone on RFD will advice you to under invoice.
This. Back in the day it was routine to lowball the selling price so the buyer paid less tax and MTO couldn't do anything about it.
[OP]
Member
Feb 24, 2013
359 posts
51 upvotes
Ontario
canoek wrote: MTO will charge at the higher of the two and for good reason. People are scammers, in fact, pretty much everyone on RFD will advice you to under invoice.
mrweather wrote: This. Back in the day it was routine to lowball the selling price so the buyer paid less tax and MTO couldn't do anything about it.
Yes, I know exactly where you're coming from. I did it myself. In this case my son actually got a good deal because of the high mileage and he's going to get screwed for it if the MTO has its way. But I have my answer, get an appraisal for sales tax purposes. Dealers and car salesmen are authorized to do these. Unsubscribing this thread, over and out.
Deal Addict
Sep 11, 2008
1255 posts
195 upvotes
Toronto
Graycern wrote: I just transferred ownership on a used car last week. They charged me the tax on the wholesale price. The seller had signed the receipt for what I paid for it, which was $600 less, but the MTO lady told me it didn't matter.
Would you happen to know how they calculated the wholesale price?
Was it based on the km and year of the vehicle or just the year of the vehicle regardless of km.
Deal Addict
Apr 22, 2013
2648 posts
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Markham
greenkiwee wrote: Would you happen to know how they calculated the wholesale price?
Was it based on the km and year of the vehicle or just the year of the vehicle regardless of km.
They clearly list it on the MTO's site. Its based off the Canadian Red book values, and they take the average price based on year, make, model. No other factors are considered. To avoid paying that much on a car like this you must do as the OP is doing and get an appraisal, at that point you pay the highest amount based on the appraisal and what the bill of sale says...so if the appraisal still is higher than what the OP paid, that's the amount that gets taxed.
[OP]
Member
Feb 24, 2013
359 posts
51 upvotes
Ontario
Just to conclude this, he's getting the vehicle appraised. A car dealer or salesman is authorized to do this for sales tax purposes, but not someone who appraises old cars for collector car insurance. The guy he got does it for $40, $50 if he has to make a house call, which is the case because the vehicle is not now plated. The used car package figure is $8450 wholesale price and at $5000, the price he paid, the HST savings will be about $450, less $50 for the appraisal, a net savings of $400. Well worth the trouble.
Deal Expert
Aug 22, 2011
35620 posts
21676 upvotes
Center of Universe
Velocrank wrote: Just to conclude this, he's getting the vehicle appraised. A car dealer or salesman is authorized to do this for sales tax purposes, but not someone who appraises old cars for collector car insurance. The guy he got does it for $40, $50 if he has to make a house call, which is the case because the vehicle is not now plated. The used car package figure is $8450 wholesale price and at $5000, the price he paid, the HST savings will be about $450, less $50 for the appraisal, a net savings of $400. Well worth the trouble.
Thats $400 dollar back in his pocket and definitely worth it...espeically keeping it out of the province greedy hands.
[OP]
Member
Feb 24, 2013
359 posts
51 upvotes
Ontario
And I fully understand why the MOT goes by their average Redbook values. You can't expect a clerk to determine that based on kilometres and condition she can't even verify. At least there's the appraisal path available.

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