This information will help persons who purchase a specified vehicle privately on or after July 1, 2010.
Tax on Specified Vehicles
Prior to July 1, 2010, Ontario Retail Sales Tax (RST) applied at the rate of 8 per cent to vehicles (including new and used motor vehicles), motorcycles, off-road vehicles, snowmobiles, boats, and aircraft sold from one person to another. RST also generally applied to vehicles purchased outside Ontario and brought into the province for personal use.
Effective July 1, 2010, RST will no longer apply to specified vehicles purchased from a GST/HST registrant, as these purchases will be subject to the Harmonized Sales Tax (HST) at a rate of 13 per cent. Private purchases of specified vehicles (purchases from a person who is not a GST/HST registrant) will continue to be subject to RST at a rate of 13 per cent.
Specified vehicles that are purchased privately in another Canadian province and brought into or delivered in Ontario after June 30, 2010 will generally be subject to either RST or HST at 13 per cent. HST of 13 per cent will generally apply to specified vehicles brought into Ontario from outside Canada.
Specified vehicles for RST purposes are:
- motor vehicles or other vehicles that require a permit under the Highway Traffic Act (e.g., motorcycles)
- off-road vehicles or motorized snow vehicles that require a permit under the Off-Road Vehicles Act or the Motorized Snow Vehicles Act (e.g., all-terrain vehicles or snowmobiles)
- boats, and
Private purchases of passenger cars, vans and light trucks that have an empty weight of 2,200 kilograms or less will continue to be taxed on the greater of the declared purchase price or the average wholesale value of the vehicle (the amount stated in the Canadian Red Book or the Canadian Older Car/Truck Red Book). Where there is no average wholesale value available (e.g., boats and aircraft), the declared purchase price is used.
Paying the RST
Purchasers are required to pay RST at a ServiceOntario Centre or Driver and Vehicle Licence Issuing Office upon the transfer of ownership of a specified vehicle unless an exemption is available under the Retail Sales Tax Act. Purchasers may also mail their RST payment to:
Ontario Ministry of Finance
33 King St W
PO Box 623
Oshawa ON L1H 8H7
Payments may be made by cheque or money order in Canadian funds payable to the Minister of Finance. Payments cannot be made at financial institutions.
Some private transfers of specified vehicles will continue to be exempt from RST. These include estate bequests, settler's effects, vehicles donated to a qualifying religious, charitable or benevolent organization or Ontario educational institution, related party transfers between corporations and shareholders, transfers resulting from a marital breakdown, gifts between family members, and transfers of commercial and state aircraft, vessels over 1,400 cubic metres and commercial vessels of 1,400 cubic metres or less.
Gifts Between Family Members
Specified vehicles may be transferred exempt from RST between family members. Currently, a family member means a father, mother, spouse (as defined in section 29 of the Family Law Act), grandfather, grandmother, son, daughter, grandson, granddaughter, son-in-law, daughter-in-law, father-in-law, mother-in-law, step-father, step-mother, step-grandfather, step-grandmother, step-son, step-daughter, step-grandson or step-granddaughter. Only one exempt transfer of the same vehicle, between family members, is allowed within a 12-month period.
Transfers between family members will also include brothers and sisters effective July 1, 2010.
Detailed information on exempt transfers can be found in RST Guide 209 - Private Purchases of Specified Vehicles on the Ministry of Finance's website.
For More Information
The Canada Revenue Agency administers the HST. Visit their website at www.cra.gc.ca/gsthst or call 1 800 959-5525 for more information.