Blog → Gifting a Car
Handing your car to your kid, your parent, or your sibling isn't the same transaction as selling it to a stranger — and ServiceOntario draws a real line between the two. Miss that line and you'll pay tax you didn't need to.
In a normal used vehicle sale, the buyer pays Retail Sales Tax (RST) when they register the vehicle in their name — calculated on either the purchase price or the vehicle's wholesale value, whichever is higher. A genuine family gift is treated differently: if the transfer qualifies, the recipient can skip that RST entirely. That's a real dollar amount, which is exactly why "I'll just say it's a gift" is a tempting shortcut for a private sale between family — and exactly why ServiceOntario requires proof it's a real gift, not a sale wearing a gift's clothing.
The RST exemption for family gifts applies to transfers between specific defined relationships — generally immediate family such as spouses, parents, children, and siblings, though the exact eligible list is set by the province and worth confirming directly at ontario.ca or with ServiceOntario before you go in, since these definitions matter and it's the kind of detail not worth guessing on. A friend, a cousin, an in-law relationship, or a common-law partner not on the eligible list may not qualify — and if it doesn't, RST applies just like a regular sale, gift or not.
To claim the exemption, the person giving the vehicle completes a sworn statement declaring the transfer is a genuine gift and identifying the family relationship. This is a specific ServiceOntario form (Sworn Statement for a Family Gift of a Used Motor Vehicle in Ontario) submitted alongside the regular ownership transfer paperwork — it isn't automatic just because no money changed hands.
Yes. A gift still requires the standard Used Vehicle Information Package for the ownership transfer, the same as a private sale. The RST exemption only affects the tax owed — it doesn't remove any of the other standard transfer paperwork.
A vehicle can't be cleanly "gifted" while a lien is still registered against it — the lender's claim doesn't disappear because ownership changed hands within a family. The loan needs to be resolved (paid off or otherwise cleared) before the transfer can go through properly, same as it would for a sale to anyone else.
If the relationship doesn't fit the eligible family definitions, or if you actually want or need money for the vehicle, gifting isn't really the tool for the job — it's specifically an RST exemption for genuine family transfers, not a general way to move a car between two people cheaply. If what you're really after is turning the vehicle into cash, that's a different, more direct path.
Looking to sell instead of gift?
Get a real, firm cash offer in under 60 seconds.
Get My Instant Offer →Related reading
"Honestly the easiest way to sell my car in Windsor. I looked at Clutch first but they wanted me to drive to Toronto. CARME called me personally — not a call centre — and had someone pick up my car the same week. I'll be recommending these guys to everyone."
"I needed to sell my car fast in the Ottawa area and CARME was the quickest option I found. Submitted online, got an offer within a minute, whole process done in two days. Painless — I'd recommend CARME to anyone."
"I got quotes from Clutch and a couple of local dealers before trying CARME. CARME gave me the best price and Michael himself called me — not a call centre. If you want to sell your car in Toronto without the runaround, these are the guys."
"Submitted my truck and had a call back within the hour. Looked at Clutch too but CARME came to me in Ottawa instead of making me drive somewhere. Offer, pickup, payment — done in two days. Couldn't have been easier."
"Best way to sell a car without the private sale headache. I didn't want strangers at my house — CARME came to me in Hamilton, gave a fair price, no haggling, cheque the next day. Easiest car transaction I've ever made."
"Had an active loan on my SUV and wasn't sure who'd buy it. CARME was the fastest option I found in Kingston — they paid out the loan directly and handled all the paperwork. Just signed the ownership and handed over the keys."