Every province has its own set of rules and regulations for transferring ownership of a car. Gifting a car in Ontario takes into consideration a variety of factors. The good news is that it can be relatively straightforward if you abide by the rules.
In this article, we’ll provide an overview of the process and highlight some key things to keep in mind, like how to transfer a car to a family member and a non-family member, the financial benefit of auto transfer, and joint car ownership in Ontario.
So, if you wish to know how to gift a car in Ontario, stay tuned.
Gifting a Car in Ontario
There are many reasons someone might choose to give a car. For instance, they may have inherited a vehicle they don’t need or want, and an Ontario car ownership transfer to a family member or friend would be more practical than selling it.
Alternatively, they may have come into some money and decided to use it to buy a car for someone who couldn’t afford it. Whatever the reason, gifting a car can be a very generous act.
How to Change Ownership of a Vehicle
You have to take a few steps to ensure the process goes smoothly. However, they differ depending on whether you transfer the car to a family member or other people.
Car Gift to Family Members
Now that you’ve decided on gifting a car in Ontario to a family member, there are a few things you have to do to make the process smooth and easy. First, you’ll need an Ontario vehicle insurance proof and an Ontario driver’s license.
The next thing to do when you give a car to a family member is to obtain a vehicle ownership permit and a vehicle plate transfer declaration.
Finally, you’ll need to provide a sworn statement for a family gift Ontario. You also need to notarize it in the case of a used car. That’s a type of affidavit of vehicle ownership.
If the person you’re gifting a car to is excused from retail tax, they may also need to provide drive clean test results.
Last but not least, many people wonder: do you need a safety to transfer ownership in Ontario? When gifting a car in Ontario, everyone will need to sign a safety standards certificate. For that, your car needs to undergo a vehicle inspection.
Another thing to remember if you want to transfer a vehicle to a family member is that inter-spouse transfers won’t be required if a spouse signs a notarized spousal declaration. Once you tick all these boxes, you can rest assured that your car gift will be successful.
Car Ownership Transfer in Ontario to Non-Family Members
If you’re gifting a car to someone who isn’t a family member and want to know how to transfer car ownership in Ontario, there are a few steps to ensure the transfer is legal.
First, you’ll need to provide the person you are gifting a car in Ontario with a used car information package.
This will include all the necessary paperwork to register the car in their name. When there’s an MTO transfer ownership, you’ll also need to sign a Bill of Sale, including your name, a buyer’s name, address, transaction date, and the purchase price.
In addition, you’ll need to fill out a transfer of ownership form on the back of the car ownership document.
Finally, you’ll need to obtain a safety standards certificate from a licensed mechanic. This will show that the car meets the required safety standards in Ontario.
Financial Benefit of Gifting a Car in Ontario
Almost everyone owns a vehicle in Canada. In fact, 37% of study respondents noted they had two or more cars. So, many people decide to give away one of their vehicles.
Vehicle ownership transfer in Ontario can be a great way to help a friend or family member in need. It can also provide financial benefits for both a giver and a receiver.
The recipient of an ownership transfer in Ontario does not have to pay retail sales tax (RST) on the vehicle value.
This can save the recipient a considerable amount of money, as RST is based on the Canadian Red Book value of the car. Additionally, in Ontario, gifting a car comes with no gift tax, so it truly means giving it away for free.
However, when gifting a car in Ontario, it’s essential to consider whether a recipient can afford the added costs, such as maintenance, car insurance, gas, and parking fees.
Gifting a vehicle in Ontario can be a wonderful gesture, but ensuring that the recipient is prepared for the additional costs of owning a car is vital.
Joint Car Ownership Ontario
In Ontario, this type of ownership is an option for any two parties—no matter if they are relatives, colleagues, or friends.
To have joint ownership of a car title in Ontario, both drivers have to put their names on the driver’s permit and sign any paperwork related to the car (such as the transfer of ownership).
Joint ownership is a simple way of sharing the car ownership cost. And, it comes with the bonus of having someone split the driving duties with.
People Also Ask
Do you have to pay taxes on a gifted car in Ontario?
When a person gifts a car to another person, changing ownership of the vehicle is not considered a taxable transaction. As a result, the recipient of a gifted car in Ontario is not required to pay the provincial retail sales tax (RST) on the car’s value.
How much does it cost to transfer vehicle ownership in Ontario?
The ownership of a car costs $32 in Ontario. This fee is the same for every vehicle type, including cars, trucks and motorcycles.
The fee is typically included in the total purchase price of the vehicle, so you don’t have to pay it as a separate charge except in a situation where you have to replace your existing ownership certificate.
Can you gift a car to someone in Ontario?
Yes, you can gift a car to someone and transfer car ownership in Ontario. Gifting a car in Ontario is relatively straightforward. Once several requirements are met, you can give the vehicle to the recipient and change car ownership.