# Declare 10 year old car $1?



## Rexkh (Mar 15, 2015)

Hi

I heard that we can declare a car of 10 year old or older for $1 when transfer ownership at SAAQ? Is it true?


----------



## sags (May 15, 2010)

Don't know about Quebec, but in Ontario a person can declare whatever they want.

The government will assign a value to the vehicle regardless of what the bill of sale says.

The purchaser pays tax on the the higher of...........the government value or the bill of sale.


----------



## DollaWine (Aug 4, 2015)

sags said:


> Don't know about Quebec, but in Ontario a person can declare whatever they want.
> 
> The government will assign a value to the vehicle regardless of what the bill of sale says.
> 
> The purchaser pays tax on the the higher of...........the government value or the bill of sale.


...unless the employee who is registering the vehicle messes up! A few weeks ago my father registered a cheap car he bought for $200. She charged him tax on the $200 when it was obviously worth more than that by the blue book. Human error.


----------



## Rexkh (Mar 15, 2015)

Is the car is older than 10 years? I'm not sure if the statement above is true?


----------



## RBull (Jan 20, 2013)

sags said:


> Don't know about Quebec, but in Ontario a person can declare whatever they want.
> 
> The government will assign a value to the vehicle regardless of what the bill of sale says.
> 
> The purchaser pays tax on the the higher of...........the government value or the bill of sale.


Quebec has basically the same rule. They don't list any tax exemption for a 10+ year old car. 

Rexkh, sounds like someone is blowing smoke. Why not simply call them and verify?


----------



## sags (May 15, 2010)

I bought a 2005 Pontiac Wave in 2012 for $3,000

It only had 35,000 kms on it, so it was a pretty good deal.

When I changed the ownership the value at the MTO was $750. I had to pay tax on the $3,000 because I had given them the receipt.

Typical day for me............LOL.


----------



## m3s (Apr 3, 2010)

They will take the higher of the book value or receipt.. so you might as well put $1.. Word on the street is quebec only has book values for cars up to 10 yrs old.. but certain cars on an undisclosed list have to be evaluated, as do all cars 25+ years old in quebec. If you sell to a relative in quebec they accept the receipt value (gave my last car to my brother tax free) So it's plausible.. and no they obviously won't answer that if you call


----------



## Rexkh (Mar 15, 2015)

So it doesn't hurt if I just say $1 and let see what they will do.


----------



## sags (May 15, 2010)

You will have to provide a receipt from the owner of the vehicle.

By the way, did you check to make sure there are no liens or outstanding debt on the car ?

In Ontario, you purchase a package that shows if any debts are outstanding against the car...........loans, mechanic repairs etc.

Taraz has responded on your other thread under Personal Finance........Driving a car when the driver is suspended.


----------



## OhGreatGuru (May 24, 2009)

If it is like most other provinces, the Licence bureau will assess the tax on the book value, not a $1 receipt. They've all had lots of experience with fake or undervalued receipts, particularly with private sales.

IMHO a $1 receipt is more likely to engender suspicion than acceptance.


----------



## bds (Aug 13, 2013)

In Ontario, if the book value is less than $1000 as is the case with most 10+ year old cars, they go by the value on the receipt. If book value is over $1000 they go with whichever is higher.

Not sure why, but that's how it's been in my experience, I've bought and sold a lot of older cars over the years.


----------



## RBull (Jan 20, 2013)

Rexkh said:


> So it doesn't hurt if I just say $1 and let see what they will do.


You can say whatever you want but as others have written you'll need a receipt as proof, so your seller must agree. 


My experience in my home province is car values for tax purposes at DMV are lower than real world prices-closer to wholesale.


----------



## Rexkh (Mar 15, 2015)

I did say $1. What they said was "Are you ready to pay 10 cents for tax?" and I said YES!


----------



## Mortgage u/w (Feb 6, 2014)

Any car 7 years+, you pay taxes on what you say you paid it. So yes, $1.00 sale is acceptable for a 7 year old car. For that matter, you should always say $1.00 if the seller agrees to it - that way, you're sure to pay on their book value and not more.

For cars considered classic (25 years+), either a bill of sale from a commercial entity or an evaluation is required and you pay based on that value. For this reason, there are car transfer companies in QC that will charge apx $125 to produce a commercial sale between 2 private parties in order to pay the least amount of tax. Few people know about this and it is considered legal. Used it myself once and it worked fine.


----------



## Brian K (Jan 29, 2011)

So make the receipt for a 'reasonable' amount - like $150 - $200 and 'as is where is" on the bill of sale. Worth trying. 
Tax was paid once when it was new. Why should it be paid again? How many times do we need to be screwed? Remember it's the Gouge and Screw Tax!


----------



## carverman (Nov 8, 2010)

OhGreatGuru said:


> If it is like most other provinces, the Licence bureau will assess the tax on the book value, not a $1 receipt. They've all had lots of experience with fake or undervalued receipts, particularly with private sales.
> 
> IMHO a $*1 receipt is more likely to engender suspicion than acceptance*.


I have to agree with that. Lots of 10 year old + cars are worth more than $1 in transfer value. 

Just look at Kijji or Autotrader to see what the listed used price for a 2005 model, and it also depends on the model. and
sometimes the mileage. A rusted hi mileage vehicle..Chevy/Pontiac Sunfire is still worth
more than $1, as it must be emission certified and safetied before it can transfer ownership...

so besides the residual value, there is also the repair cost, although it is not factored in by the licence bureau when establishing actual residual value.

*The only time I was able to get a vehicle in Ontario (back in the 80s) transferred for the sum of $1,* was to have my step father transfer his ownership of his 85 Chev Caprice to me , as gift to a family member. 

We both had to sign special MTO papers (at the MTO bureau for that,. Later on MTO sent us each a confirmation letter"
(about 6 months-year later, probably due to an audiit), separately to me and my stepfather,( we were living at different towns/addresses); to try and catch any impropriety in the transaction.
A fine could have been assessed to each of us for making a false statement on these special forms and besides paying the actual salestax on the real value.... IF it had been between UNRELATED parties.

We answered truthfully because it WAS a Gift..cost me nothing except for a safety check. It was a low mileage car (less than 20,000km on the speedo,which also had to be reported at time of transfer.

This was about 5 years later into the model year (1985) around 1990-91, and the car was definitely worth a lot more in blue book value at the time.


----------



## carverman (Nov 8, 2010)

Brian K said:


> So make the receipt for a 'reasonable' amount - like $150 - $200 and 'as is where is" on the bill of sale. Worth trying.
> Tax was paid once when it was new. Why should it be paid again? How many times do we need to be screwed? Remember it's the Gouge and Screw Tax!


In Ont it's 13%..Gouge and Screw + Provincial Sucking tax...
While it's not fair that an item used by consumer can be taxed again after the intial purchase, the provincial treasury doesn't care..this tax is applied again and again on any items of value to the consumer that can be taxed..
such as used appliances, if purchased from a dealer with a HST registration, and used anything,
if bought from a business that has to charge the taxes.


----------



## Brian K (Jan 29, 2011)

Provincial Sucking Tax - Good one Carverman. I know the Provinces don't care about fairness - only about their revenue stream. At least used houses don't have the GST applied to them.

The $1 on a receipt for an old car just smells fake. So make it pass the smell test. I didn't know they probably use some book value which probably assumes 'normal' condition. Many factors affect the sale price of a used vehicle. I wonder how sNotley will charge a carbon tax on used cars in Alberta LOL - probably hasn't thought about that (yet).


----------



## andrewf (Mar 1, 2010)

In principle, there should be no HST on used cars. The HST was paid in full on the car when new, and unless the seller gets a rebate on the HST they paid originally, there is not reason the government should be collecting HST on the sale. Otherwise it is double taxation.


----------



## carverman (Nov 8, 2010)

Brian K said:


> Provincial Sucking Tax - Good one Carverman. I know the Provinces don't care about fairness - only about their revenue stream. At least used houses don't have the GST applied to them.


onlyon the RE fees and the closing lawyer fees.



> The $1 on a receipt for an old car just smells fake. So make it pass the smell test. I didn't know they probably use some book value which probably assumes 'normal' condition. Many factors affect the sale price of a used vehicle. I wonder how sNotley will charge a carbon tax on used cars in Alberta LOL - probably hasn't thought about that (yet).


the blue book value they use depends on the age and condition of the vehicle.

For instance: If for some reason you were trying to transfer a '69 Mustang to someone, so they could avoid paying a 
LOT of sales tax, and wrote them a bill of sale for $1, or even a $100, the MOT would take the new owner's 0.13c as tax or even $1.30 ion the hundred....... and in a few weeks/months time you would get a letter from the MOT asking for an appraisal of the car from a certified vehicle appraiser.

If you got caught by MOT, stiff fines would be in order.
http://www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.nsf/GetFileAttach/013-1157E~1/$File/1157E.pdf

1969 Ford Mustang Mach 1
Sale Price: $49,500.


----------



## Brian K (Jan 29, 2011)

I bought a 07 Mustang a few years ago (used) and had to pay GST on it - because I bought it at a dealer. If it was a private sale, then there would not be any GST IIRC. I think it has to do with the buyer of the new car trading the old one in and only paying GST on the balance, which of course then shift the burden of GST to the purchaser of the used vehicle.


----------



## carverman (Nov 8, 2010)

andrewf said:


> In principle, there should be no HST on used cars. The HST was paid in full on the car when new, and unless the seller gets a rebate on the HST they paid originally, there is not reason the government should be collecting HST on the sale. Otherwise it is double taxation.


When it comes to collecting taxes, governments are very inventive these days. The original tax may be a manufacturers sales tax, the repeat taxes are consumption taxes.

Billions are collected that way and the Wynne gov't needs every cent they can collect to support all their debt load.


----------



## carverman (Nov 8, 2010)

Brian K said:


> I bought a 07 Mustang a few years ago (used) and had to pay GST on it - because I bought it at a dealer. If it was a private sale, then there would not be any GST IIRC. I think it has to do with the buyer of the new car trading the old one in and only paying GST on the balance, which of course then shift the burden of GST to the purchaser of the used vehicle.


interesting in AB that someone can buy a vehicle from a private seller and not have to pay GST when registering the vehicle in the new owners name.
AS far as paying the difference on the purchase/trade in of the newer vehicle, it is that way in Ontario as well.
For instance: New vehicle: $25,000 sales tax if no trade in: $3250

trade in on 5 year old car $4000.....$25,000-$4000 = $21,000 x 13% $2730

Used tradein car sells for $6000 with dealer markup: = $780 

Total;sales tax collected: $3510

windfall to MOT =$260


----------

