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The 2018 Ontario Economic Outlook and Fiscal Review is proposing to remove reference to the Canadian Red Book and the Canadian Older Car/Truck Red Book (R.R.O. 1990, Regulation 1012 made under the Retail Sales Tax Act).

This page explains how Retail Sales Tax (RST) applies to specified vehicles purchased privately in Ontario or that are purchased privately elsewhere in Canada and brought into Ontario for use. Please note that this page replaces the former RST publication entitled Specified Vehicles dated November 2013.

If you require additional information please contact the Ministry of Finance toll free at (1-866-668-8297) or visit ontario.ca/finance.

RST does not apply to specified vehicles purchased from a GST/HST registrant within Canada or to specified vehicles purchased outside Canada. For information on the obligation to pay the federal and provincial portions of the Harmonized Sales Tax (HST), contact the Canada Revenue Agency at 1-800-959-5525 or visit cra.gc.ca/gsthst.

Disclaimer

The information contained on this page is provided only as a guideline for transactions on or after July 1, 2010 and is not intended to replace the legislation.

Definition of specified vehicle

Specified vehicles include:

  • motor vehicles or other vehicles for which a permit is required under the Highway Traffic Act to operate on a highway, such as:
    • automobiles
    • motorcycles and motor scooters (including limited speed motorcycles)
    • mopeds
    • buses (e.g., school buses)
    • trucks and vans
    • motorized recreational vehicles (e.g., motor homes)
    • trailers (e.g., travel trailers, fifth wheel trailers, sport trailers, etc.)
  • off-road vehicles or motorized snow vehicles that require a permit under the Off-Road Vehicles Act or the Motorized Snow Vehicles Act
  • boats (e.g., motor boats, personal watercraft, sail boats, canoes, etc.)
  • aircraft.

The following are examples of vehicles that are not specified vehicles:

  • bicycles
  • electric bicycles
  • mobile homes.

Specified Vehicles purchased privately in Ontario

RST at the rate of 13 per cent is payable on the fair market value of a specified vehicle purchased privately (i.e., from a person who is not a GST/HST registrant) in Ontario, unless an RST exemption is applicable. RST is collected at ServiceOntario Centres across Ontario.

Automobiles, vans and trucks that have an empty weight of 2,200 kilograms or less

For an automobile, van or truck (that has an empty weight of 2,200 kilograms or less), fair market value generally means the greater of the vehicle's purchase price or the amount stated in the Canadian Red Book or the Canadian Older Car/Truck Red Book (Red Book) in respect of the vehicle.

If the Red Book value is less than $1,000, the fair market value is the purchase price of the specified vehicle.

Appraisals for excessively used or severely damaged vehicles

For an excessively used or severely damaged automobile, van, or truck (that has an empty weight of 2,200 kilograms or less) and a Red Book value of $1,000 or more, the purchaser may choose to have the vehicle appraised. If the purchase price and the appraised value are both less than the Red Book value, then RST will be collected on the greater of the purchase price or appraised value.

The qualifying appraiser must complete the required information on the Motor Vehicle Appraisal Record form. The appraised value of the vehicle will only be accepted if the appraisal is completed by:

  • a licenced motor vehicle dealer that has a registration/dealer number issued by the Ontario Motor Vehicle Industry Council. The registration/dealer number must be recorded on the appraisal form.
  • an independent motor vehicle appraiser that has been issued an appraiser number by the Ministry of Finance. The appraiser number must be recorded on the appraisal form.

If the purchaser paid RST on the vehicle's Red Book value at the time ownership was transferred, but later obtains an appraisal lower than the Red Book value, the purchaser may claim a refund. The amount of the refund will be the difference between the RST paid and the RST payable on the greater of the vehicle's appraised value or its purchase price. To qualify for the refund the appraisal must be completed within 60 days from the date of purchase.

Antique vehicles purchased privately within Canada

For an automobile, van or truck (with an empty weight of 2,200 kilograms or less) that is 20 years or older at the time of registration, and that is purchased privately within Canada, RST is payable on the greater of the following:

  • the purchase price, and
  • the replacement value for insurance purposes, or
  • the appraised value.

A copy of the bill of sale and either a copy of the appraisal document or an insurance policy showing the insured value of the vehicle must be provided to the ServiceOntario Centre at the time of registration.

Other specified vehicles

For specified vehicles, other than those identified above, fair market value means the purchase price. Some examples include motorcycles, motor homes, off-road vehicles, snowmobiles, boats, aircraft and trailers.

Trade-ins

For RST purposes, the purchase price includes the value of things exchanged and other considerations accepted by the seller. In other words, a trade of any nature will not decrease the value on which RST applies to a specified vehicle.

Specified vehicles purchased privately in another province

Generally, when a specified vehicle is purchased privately in another Canadian province or territory and is brought or delivered into Ontario for use, RST at the rate of 13 per cent applies to the purchase price of the vehicle (other than automobiles, vans or trucks with an empty weight of 2,200 kilograms or less that are 20 years or older at the time of registration). See the earlier section titled Antique vehicles purchased privately within Canada.

Specified vehicles purchased from GST/HST registrants in Canada and specified vehicles brought into Ontario from outside Canada

RST does not apply to a specified vehicle that is purchased from a GST/HST registrant in Ontario or elsewhere in Canada on or after July 1, 2010. RST also does not apply when a specified vehicle is brought into Ontario from outside Canada.

For information on the obligation to pay the federal and provincial portions of the HST, please contact the Canada Revenue Agency at 1-800-959-5525.

Exempt transfers of specified vehicles

Specified vehicles may be exempt from RST under the following circumstances, where criteria for claiming an exemption are met and required documentation is provided to support the exemption claimed.

Estate bequests

A specified vehicle may be transferred exempt from RST to a beneficiary provided the following supporting documentation is presented at the time of vehicle registration. For the purpose of this page, the position of estate executor, executrix and administrator is referred to as estate trustee.

If a will does exist, the beneficiary must have the will (original or certified copy) that clearly names both:

  • the estate trustee:

    • Note: If an estate trustee is not identified in the will, the beneficiary will also require a document that identifies the person assigned as estate trustee (e.g., a copy of the Certificate of Appointment of Estate Trustee with a Will, other court document, etc.)

  • and the person that is to inherit the vehicle (beneficiary):

    • Note: If the beneficiary is not clearly identified as the person to inherit the vehicle, he/she will also require a letter from the estate trustee which includes:
      • the estate trustee's name
      • the name of the beneficiary of the vehicle
      • the vehicle details (VIN, year, make, model).

If a will does not exist, the beneficiary must have a letter from a lawyer (or a court document) stating the person is the legal beneficiary of the vehicle. The following information must appear on a lawyer's letterhead and state:

  • a will does not exist
  • the name of the beneficiary of the vehicle
  • the vehicle details (VIN, year, make, model).

If two legally married people have a jointly registered vehicle, and one owner dies, the survivor can transfer the vehicle exempt if he/she has a death certificate (or a certified copy). In this case, the documents noted above would not be required.

In all other joint ownership cases, including common law spouses, the surviving owner must provide the supporting documents identified earlier in this section (depending on whether a will exists or not) to support that they are the legal beneficiary in order to transfer the vehicle into their individual name exempt of RST.

Gifts between family members

A specified vehicle may be transferred exempt from RST to a person from a member of his or her family provided no consideration was given in respect of the vehicle.

A family member means a father, mother, spouse (which includes a common law spouse), brother, sister, 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. Half siblings (siblings with a common parent), adopted siblings (siblings with a common parent by way of adoption), adopted son, adopted daughter, adopted grandchild, and great grandmother and great grandfather also qualify as a family member for the purpose of this exemption.

Only one exempt transfer of the same vehicle, between family members, is allowed within a 12-month period.

If the vehicle is currently registered jointly, the vehicle recipient must be a qualifying family member to both jointly registered owners to qualify for this exemption. If the vehicle will be jointly registered, both vehicle recipients must qualify as a family member to the donor to qualify.

If a specified vehicle is given to a qualifying family member, the family members are required to complete a Sworn Statement for a Family Gift of a Used Vehicle in the Province of Ontario. This form requires the signature of a Commissioner of Oaths or a Commissioner for Taking Affidavits. The completed form is to be provided to the ServiceOntario Centre at the time the ownership is transferred.

Family breakdown

A specified vehicle acquired from a spouse or former spouse as the result of a breakdown in the relationship is exempt from RST if it is part of a settlement under the Family Law Act. One of the following documents must be presented to the ServiceOntario Centre the time of registration to support the exemption: Sworn Statement for the Transfer of a Used Motor Vehicle in the Province of Ontario, a Separation Agreement, or a Divorce Agreement, or other similar court document.

Donated vehicles

A specified vehicle may be donated exempt from RST to a qualifying religious, charitable or benevolent organization if the donor paid the applicable tax on the original purchase. The organization is required to provide a Sworn Statement for the Transfer of a Used Motor Vehicle in the Province of Ontario to the ServiceOntario Centre at the time the ownership is transferred stating that the vehicle is a gift.

A religious, charitable or benevolent organization means any organization defined as a registered charity by the federal government under subsection 248(1) of the Income Tax Act (Canada) and which holds a charitable registration number issued by the Canada Revenue Agency.

In addition, a vehicle may be donated to an Ontario school, college or university exempt from RST. In this case, there is no requirement for the donor to have previously paid the tax on the donated vehicle. The school will require a letter from the donor, stating the vehicle was donated to the school for no consideration, to show to the ServiceOntario Centre at the time the ownership is transferred.

Status Indians, Indian bands and councils of an Indian band

Effective September 1, 2010, Status Indians, Indian bands and councils of an Indian band may transfer a specified vehicle purchased privately off-reserve exempt from RST. The vehicle is not required to be registered or delivered to a reserve address in order to qualify for the RST exemption. The specified vehicle must be for the consumption or use by a Status Indian or exclusively for the consumption or use of the band or council of the band.

To claim an exemption, Status Indians are required to present their Certificate of Indian Status identity card or their Temporary Confirmation of Registration Document issued by the federal government to the ServiceOntario Centre. Indian bands and councils of an Indian band are required to present a letter from the band or council certifying the vehicle is exclusively for the consumption or use of the band or the council of the band. The letter must be on appropriate letterhead, dated and signed by an authorized member of the band or council. Indian, Indian band and council of an Indian band have the same meanings as defined in the Indian Act (Canada).

Farm vehicles

Persons actively engaged in the business of farming and that have one of the following documents (at the time of ownership transfer):

  • a farmer identification card issued by a general farm organization (e.g., Ontario Federation of Agriculture, Christian Farms Federation of Ontario, National Farmers Union)
  • a letter from the Agriculture, Food and Rural Affairs Appeal Tribunal
  • a letter from the Indian Agricultural Program of Ontario
  • a letter from the Elected Chief of Six Nations Council
  • a letter from Agricorp
  • a Gross Farm Income Exemption Certificate,

may transfer the following vehicles exempt from RST provided the vehicle will be used exclusively in the business of farming:

  • all-terrain-vehicles (ATVs), that are equipped with a carrying platform or rack and have an engine displacement of 200cc or more
  • licensed and (plated or unplated) trailers specifically designed for transporting livestock or farm crops.

Note: Other vehicles (e.g., trucks without plates, etc.) do not qualify for this exemption.

A person engaged in the business of farming means a person who undertakes farming with a reasonable expectation of profit.

Foreign representatives, officials and entities of foreign states

The federal government authorizes certain foreign entities and representatives/officials to receive an exemption from RST on private purchases of specified vehicles. Please refer to the Ministry of Finance web page entitled Retail Sales Tax Exemption for Foreign Entities, Representatives and Officials for details about eligibility and how to claim the exemption.

Settler's effects

Individuals that are settlers may bring a specified vehicle into Ontario exempt from RST.

Individuals are considered settlers if:

  • the individual was a resident outside of Ontario for at least one year before taking up residence in Ontario (individuals who keep their Ontario residence during a temporary absence, i.e., less than one year, do not qualify), and
  • the individual has entered Ontario with the intention of establishing or re-establishing a residence for a period longer than one year.

Eligible individuals may bring their specified vehicle(s) into Ontario exempt from RST if they:

  • owned by them for at least 30 days immediately before taking up residence in Ontario, and
  • the vehicle is brought into Ontario for use and consumption in Ontario within six months of the individual taking up residence in Ontario.

Individuals that are settlers, moving from another Canadian province or territory, must have paid all applicable taxes owing to their former province or territory in order to claim the Ontario exemption. The exemption is not available if the taxes owing to the other jurisdiction have been refunded or are refundable. Proof that the vehicle was previously licensed in another province, territory, or country (e.g., registration/ownership document) must also be provided.

Military personnel may qualify for this exemption if all the above conditions are met and one of the following documents is presented at the time of transfer:

  • marching orders
  • a letter from the military or the Canadian Forces verifying he/she is military personnel.

Businesses moving to Ontario or moving vehicles (or a fleet) from one location to another do not qualify for this exemption.

Transfers between Related Corporations, or between Corporations and Shareholders

If the purchase qualifies as a private sale (i.e., the previous owner [seller] is not a GST/HST registrant), the vehicle recipient may qualify for an exemption from RST provided certain conditions are met. Please see the Ministry of Finance publication entitled Retail Sales Tax and Harmonized Sales Tax Information for the Transfer of Motor Vehicles Between Related Corporations or Corporations/Shareholders for more information about qualifications and supporting documentation.

Under certain conditions, some purchasers may be required to pay RST at the time of registration but may claim a partial refund based on the percentage of ownership and other conditions. To claim a refund of RST paid they must submit an Application for a Refund of Ontario Retail Sales Tax for Motor Vehicles Purchased Privately to the Ministry of Finance, along with the supporting documentation.

Other exempt transfers

An RST exemption may also be available in other circumstances, including the transfer of a specified vehicle:

  • for insurance, financing or security purposes if the vehicle owner provides a completed Sworn Statement for the Transfer of a Used Motor Vehicle in the Province of Ontario confirming that he/she is retaining ownership/possession and use of the vehicle and that the vehicle is only being registered in another person's name for insurance, financing or security purposes.
  • for repossession purposes by a financial institution or individual. Financial institutions must provide a letter stating that the vehicle is being repossessed. Individuals require an authorization letter from the Ministry of Finance to transfer the vehicle without the payment of RST.
  • for wrecking purposes. Transferors must hold a class C license issued by the Ministry of Transportation and the vehicle must be transferred to a WRK status.
  • for temporary purposes (not as a result of a sale) between a carrier and another person such as a broker driver. The plate portion must remain in the owner/broker's name. A copy of the bill of sale showing that the owner paid the applicable tax and a letter entitled Transfer of Vehicle Registration Pursuant to the Highway Traffic Act from the carrier must be provided to the ServiceOntario Centre. If any of these documents cannot be provided, a Sworn Statement for the Transfer of a Used Motor Vehicle in the Province of Ontario must be provided.
  • used as a taxi between its registered owner and the holder of a taxi licence issued by the municipality. A copy of the taxi leasing agreement or other similar agreement between the owner of the taxi license and the registered owner of the vehicle must be provided to the ServiceOntario Centre.
  • a fire fighting vehicle purchased for more than $1,000 for the exclusive use of a municipality, university, public hospital, local services board or volunteer group.

Exemptions applicable only to boats and aircraft

In addition to the above listed exemptions, which are available for specified vehicles generally, the following exemptions are available for boats and aircraft:

  • Boats over 1,400 cubic metres.

  • Boats, 1,400 cubic metres or less, that are operated for commercial purposes.

    Commercial purposes means:

    • use exclusively for regularly-scheduled public transportation services
    • the transportation of goods, and
    • the operation of a tugboat,

    but do not include:

    • the operation of boats for tourists
    • the operation of boats for charter or tour services that may or may not make scheduled stops incidental to the service
    • the ferrying of pilots or work crews, or
    • the operation of boats for sporting, entertaining or recreational purposes.
  • Boats, of any size, purchased by a person engaged in the business of fishing and used solely for commercial fishing purposes. A person engaged in the business of fishing means a person who undertakes fishing with a reasonable expectation of profit.
  • Firefighting boats/vessels that are designed and equipped at the time of purchase for firefighting.
  • Commercial aircraft, provided they are for the use of the general public and not primarily reserved for a particular person and operated or available for operation for hire or reward. State aircraft used exclusively in the service of Her Majesty in right of Canada or in right of a province (e.g., an aircraft acquired for emergency services) are also exempt.

How to pay the RST

For specified vehicles, other than boats and aircraft, the applicable RST is payable at the time the vehicle is registered at the ServiceOntario Centre.

Although boats and aircraft are not registered at ServiceOntario, RST payments for boats and aircraft can be made at any ServiceOntario Centre which can be found using the ServiceOntario Service Location Finder at ontario.ca/findservices. Payment can also be made directly to the Ministry of Finance. For payments that will be mailed to the Ministry of Finance, a cheque or money order should be made payable to the Minister of Finance with a copy of the bill of sale and mailed to:

Ministry of Finance
33 King St W PO Box 623
Oshawa ON L1H 8H7

To ensure that RST has been paid on all taxable boats and aircraft, the Ministry of Finance routinely reviews the records of Transport Canada. Therefore, when a boat or aircraft is registered, the purchaser may be contacted by the ministry to confirm that applicable RST was paid.

It is important to ensure that RST is paid (when applicable) as non-compliance may result in penalties and interest.

Refunds and rebates

The Application for a Refund of Ontario Retail Sales Tax for Motor Vehicles Purchased Privately can be used to claim a refund and is found on the ministry's website at ontario.ca/finance. Completed application forms together with supporting documentation should be mailed to the Ministry of Finance (as indicated on the form) within four years from the date the RST was paid.

Refund for RST

A refund of RST may be claimed on the purchase of a specified vehicle where:

  • RST was paid in error
  • a vehicle has a reduced value due to excessive use or severe damage and a valid appraisal is provided, or
  • an exemption is applicable but the required documentation was not provided to the ServiceOntario Centre at the time of registration.

Rebate for specified vehicles permanently removed from Ontario

A person who purchases a specified vehicle in Ontario and subsequently removes the vehicle from the province for permanent use outside of Ontario may apply for a rebate of the RST that was paid. To qualify for the rebate, all the following conditions must be met:

  • the vehicle is permanently removed from Ontario within 30 days of purchase
  • the RST paid on the invoice is $50 or more
  • residents of other Canadian provinces are required to pay the applicable sales tax to their home province on the vehicle being claimed and provide proof of payment of tax. If the vehicle is purchased for use in a jurisdiction where sales tax is not payable, a copy of the bill of lading or customs documents must be provided as proof of removal.

Contact us

If this page does not completely address your situation, refer to the Act and related regulations, visit our website at ontario.ca/finance or contact us by:

Mail: 
Ministry of Finance
Tax Information Office
33 King St W, 1st Floor
Oshawa ON L1H 8H5