MTO Valuation You must pay sales tax when you buy a used vehicle privately. The amount of tax is on either the purchase price or the vehicle's wholesale value, whichever is more.
What is the “wholesale value”? Wholesale value is based on the Canadian Red Book, which lists the wholesale and retail values of used vehicles. This book is an accepted industry standard used by car dealers, insurance companies and other provincial governments.
How are the wholesale and retails values determined? For personal vehicles, these values are based on the average amounts paid for vehicles of the same year, make and model. The values do not take into account optional equipment, vehicle condition, or the number of kilometres. These values can change from the date you pick up the Used Vehicle Information Package to the date of the vehicle transfer. For passenger and light commercial vehicles (2,200 kilograms and under empty weight) 20 years or older, the retail sales tax is payable on the purchase price, replacement value for insurance purposes, or appraised value, whichever is more. If you paid less than the Canadian Red Book value, you can get the vehicle appraised before changing ownership. If the appraisal supports a lower price then the Canadian Red Book, the buyer pays tax based on the higher value. An appraisal or insurance document showing the vehicle’s value must accompany the bill of sale. If the vehicle transfer and tax payment based on the average wholesale value are complete, an appraisal and an application for a tax refund must be sent to the Ministry of Finance. Appraisal forms are available from Driver and Vehicle Licence Issuing Offices and Ministry of Finance offices.
Note: if you are buying a vehicle from a licensed motor vehicle dealer, you must pay the Retail Sales Tax and the Goods and Services Tax to the dealer. If you are buying a vehicle privately, you are not required to pay Goods and Services Tax. To request an appointment please use our appointment request form. |
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