Selling out of Province

Thanks to the Internet and all the Social Media, dealers are selling more and more vehicles to people from other provinces without having to see the car in person.

It is common for a vehicle to be sold without even meeting the buyer face-to-face, signing the bill of sale by fax, and shipping the vehicle to the buyer out of the province. However, the process to transfer the vehicle registration will be different depending on the scenario:

1.  The dealer must obtain a special permit if the buyer wants to drive the vehicle home. The buyer must present proof of insurance for the special permit to be issued. When the permit is obtained, the buyer has ten days to drive the vehicle to his address and register it in his province of origin.
2. If the buyer does not come to Ontario, it will normally not be possible to register the vehicle in his name in Ontario. In that case, simply sign the Ontario registration permit and send it to the buyer with the vehicle so they can register it in their home province. Then, change the vehicle’s Ontario registration status to “SOLD” status at the licensing office.

Rules:

Regardless of the customer’s residence, 13% HST will be applied to the sale if delivery occurs in Ontario.

Should delivery occur outside of Ontario, the appropriate provincial tax ought to be incurred.

• When the car is delivered, the customer is deemed to have taken possession of it.
• Delivery occurs in Ontario if the client drives the car home after picking it up there.
• Delivery occurs in Ontario if the buyer is listed as the consignor on the bill of lading and the vehicle is sent out of province. Whoever pays the shipping invoice is irrelevant.

The federal tax rates in several provinces differ from those in Ontario. The rates for GST and HST in each Canadian jurisdiction are listed below:

Nova Scotia 15
Prince Edward Island 15
New Brunswick 15
Newfoundland 15
Ontario 13
Alberta 5
British Columbia 5
Manitoba 5
North West Territories 5
Nunavut 5
Quebec 5
Saskatchewan 5
Yukon 5

Once they have registered the car in their home province and paid any applicable provincial taxes, out-of-province purchasers from non-HST provinces and territories may apply to the Canada Revenue Agency for a refund of the 8% provincial component of the HST paid in Ontario.

Rebate Application

Out-of-province purchasers from non-HST provinces and territories may apply for a refund of the 8% provincial portion of the HST paid in Ontario from Canada Revenue Agency, once they have registered the vehicle in their home province and paid any applicable provincial taxes.

If you need more information about that, contact us at 416-985-CARS (2277) or check the following link: https://www.ucda.org/dealer-faqs/buying-and-selling/selling-out-of-province/

References: UCDA (THE USED CAR DEALERS ASSOCIATION OF ONTARIO)