Buying a used car.

[Edifice]

Just curious, when buying a used car off someone (private sale) does one have to pay gst/pst on it?

The reason I ask is because I went to look at a car someone was selling and they told me I would have to pay pst when I take it to the MTO.

I thought only when you buy a used car from a dealer that you have to pay gst and pst.

Is this the case for private sales as well?

 

[bigguy2004]

You have to register the car in your own name through MTO. This requires proof of purchase from the private seller. You will have to pay tax on the selling price of the car. The only way to avoid some of the taxes paid would be to make some arrangement with the seller to write in a price lower than you agree to pay and then you would just be paying the taxes on this lower amount. But the price listed would still have to be "reasonable" based on the car purchased. Just suck it up and pay the taxes - it isn't worth all the hassle.

 

[bestillmehard]

If the purchase price is lower than book value, you end up paying tax on the higher price. My winter beater was 5g and I paid over 700 in tax.

 

[tboy]

If the purchase price is lower than book value, you end up paying tax on the higher price. My winter beater was 5g and I paid over 700 in tax.

Exactly, I believe you pay the price on what the vehicle is listed as being worth, not what you paid for it. The government caught on to the alternative payment scam years ago......

 

[chazz_matzz]

You can have the vehicle you are buying appraised. The taxes are based on the apraised amount. Your local dealer will have the ministry forms to do this. PM if you need more info

C

 

[boffo]

If it's a private sale you have to pay PST on the book value of the car. You don't have to pay GST though unless it is bought from a car dealer.

It is possible to pay less PST on the book value of a car.

About 10 years ago I bought an old truck from a guy that had a book value of about $6000. according to the government charts. The true price of the truck was about 1,000 or 1,100 or so.

After I bought the truck I took it to a used car dealer dealer to get the car appraised and he appraised it for me at something like $400.00. (I had to pay the dealer $50.00 to get him to appraise it a $400.00.)

So, when I took it to the office to register the truck in my name I only had to pay PST on $400. rather than $6,000. So, my PST cost was only $28.00 rather than $420.00.

 

[Hard Idle]

The minimum book value tax is only waived when transferrign a vehicle to a spouse or immediate family member. It can be lowered with an appraisal. I believe you can also lower it buy initially buying it as "unfit" in which case a lower minimum wholesale value will apply.

 

[l69norm]

...I thought only when you buy a used car from a dealer that you have to pay gst and pst...?

In theory, buying a car from a dealer is about 7% cheaper than from a private seller, so dealer+gst/pst is suppose to be about the same as private+pst

 

[Damondean]

Buy New! Support the economy! LOL

 

[zekestone]

On private sales, PST only. You pay GST at a dealer because you're getting the 'service' from the dealer.

Even if you lie and have an abnormally low price, they'll just use the book value and make you pay PST on that when you register it.

BUT, if you're buying the car for parts (privately), then you can just buy it and never register it... hence, no tax paid.