Cars are as essential to our daily lives in Ontario as social media and a hot beverage are to our morning routine. It is more challenging to name friends or family who don’t utilize a car in their daily travels. In 2017, Ontario had the highest number of motor vehicles registered at 8.7 million. But what does car ownership mean? And how does transferring car ownership in Ontario work when we decide to gift or sell it? Let’s go through what car ownership entails, how to transfer car ownership to a family member, and what we need to do to prepare the permit transfer when we sell the car to a third party.
What Does Car Ownership Mean?
When taking possession of a vehicle, whether you’ve bought it from a dealership or through a private sale, you will likely be given a green document once the transfer process has been completed. It is commonly referred to as the “vehicle title” or “vehicle permit.” This permit is used as proof of ownership. It will include information such as the VIN (vehicle identification number), make and model of the car, the name and address of the owner, the license plate number, and the sticker expiration date. Legally, you are required to carry this permit with you at all times while driving. Most drivers keep their permits in the glove box or center console of the vehicle for easy access in case of an accident or if requested by police.
What Documents Will I Need to Transfer the Permit?
If you decide to gift the vehicle to a family member or choose to sell the vehicle, it is best to have the following paperwork in order:
- proof of your Ontario vehicle insurance
- your Ontario driver’s licence
- Safety Standards Certificate (if you are selling the vehicle and not transferring the vehicle to your spouse)
- Spousal Declaration (if you are transferring the ownership to a spouse and not selling it to a third party)
- Vehicle Ownership Permit with the completed portion on the back
- If you are also transferring the license plate (only permitted between spouses, parents, and children), you will need a completed Plate Transfer Declaration
- a completed Sworn Statement for a Family Gift of a Used Motor Vehicle in the Province of Ontario form
- Emissions test results
How Do You Transfer Vehicle Ownership to Family Members as a Gift?
You can transfer vehicle ownership to most family members as a gift. Who does this include? Here is a list of those eligible from ontario.ca:
- spouse (including a common-law spouse)
- parent or step-parent
- grandparent or step-grandparent
- son or step-son
- daughter or step-daughter
- Grandson or step-grandson
- granddaughter or step-granddaughter
- son-in-law
- daughter-in-law
- father-in-law
- mother-in-law
- sibling
- half-siblings (siblings with a common parent)
- adopted siblings (siblings with a common parent through adoption)
You do not have to pay retail sales tax when you transfer.
To complete an ownership transfer to the family, you need to provide the following documentation to Service Ontario:
- Proof of insurance
- Your driver’s licence
- Vehicle ownership permit
- A completed sworn statement for a Family Gift of a Used Motor Vehicle in the Province of Ontario form
- Safety Standards Certificate (not required if transferring to a spouse)
- Emissions test
- A completed plate transfer declaration (if you are also transferring licence plates)
While a much less complicated process than selling a vehicle to a third party, transferring ownership to a family member requires a few essential steps. You can transfer ownership of your car in Ontario to a family member without requiring them to pay retail sales tax (RST), but it can only occur once per 12-month period.
Transferring Ownership When Selling a Vehicle
Before entertaining offers, there are a few details that need to be taken care of when you transfer car ownership in Ontario:
- Used Vehicle Information Package (UVIP): This package contains the vehicle details, including the year, make, model, color, body type, cylinders, and power.
- Make sure that your vehicle’s Vehicle Identification Number (VIN) matches the number on your permit (your green ownership document).
- Check to ensure the vehicle has no money owing on it. Cars with a lien or outstanding debt can have the ownership transferred, but not without risk. If the lien is not paid, the debt holder has the right to repossess the vehicle from the person who owes the money (seller) OR from the buyer of the car.
Always check for the lien information on the Used Vehicle Information Package! Once you have found your buyer and have a mutually agreed upon sale price, it is your duty to hand over the UVIP, ensuring you complete the information on the package.
What’s Next?
You must also complete and sign the Application for Transfer located on the back of the “vehicle portion” of the permit (registration) and give it to the buyer. You must write down the name and address of the buyer, record the mileage, indicate the date of sale, and sign the form. Keep the “plate” portion of the ownership for your use. Additional notes include:
- Remove your license plates from the vehicle. Remember, plates travel with the driver, not the car. Ensure you also keep the “plate portion” of your permit (ownership). You will need this to register your plates on another vehicle.
- Transfer funds. Cash and bank drafts delivered in person are the best and most secure forms of payment when privately selling your used car. Avoid personal cheques or wire transfers, as these are more susceptible to fraud.
Other Considerations
Can a car be registered under two names in Ontario?
Yes. Joint ownership of a vehicle is possible. The two parties can be family, friends, or colleagues. In this case, both names will be used on the permit and on any other paperwork, such as the transfer of ownership.
How is the vehicle permit essential to insurance and accidents?
The vehicle permit is critical when making insurance claims, as the compensation goes to the person listed as the vehicle’s owner. Another little-known fact is that the car’s prior owner (seller) holds legal liability for the vehicle until the buyer at Service Ontario completely processes it.
Should I have a contract for selling the car?
Yes. You are making a legal sales transaction. A bill of sale is a type of sales receipt. For private sales, it details the transaction between a buyer and seller. In the case of a car sale, it acts as proof of ownership transfer. They are both sales receipts and proof of purchase from your transaction.
Can I transfer vehicle ownership online?
In short, no. You must visit a ServiceOntario center in person to complete the process for a private sale. Some steps, like filling out the bill of sale or Sworn Statement for a Family Gift online, can be done online. However, the final transfer of ownership needs to be in-person!
What happens if vehicle ownership is lost?
Unfortunately, with the hustle and bustle of our busy lives, we can occasionally misplace essential documents. You can replace lost, damaged, or stolen vehicle ownership papers at any Service Ontario branch office. Be sure to bring identification, driver’s license, VIN, and proof of insurance. A fee of $32 will be charged for their production.
How do you transfer ownership of a car after death in Ontario?
Transferring ownership after death can play out in several ways. The executor of the will must visit ServiceOntario and provide a copy of the will, vehicle ownership papers, personal identification, proof of insurance, and proof of death certificate to transfer to a beneficiary.
- If the spouse is the executor of the will and the vehicle is being transferred to a family member, the rules for transferring ownership of a car to a family member apply.
- If two married people have a jointly owned vehicle, the surviving person can transfer ownership into their name. A death certificate is required to complete the transfer of a car after a death.
- If the deceased does not have a will, the executor must prove the recipient of the vehicle is entitled to it. You can get a letter of opinion drafted by your lawyer and present it to the Ministry of Transportation.
When must the transfer of car ownership in Ontario be complete?
The buyer must register their name as the vehicle’s new owner within six days of the purchase. To register the car, you must visit a Service Ontario center and bring proof of insurance and your Ontario driver’s license.
Will there be a tax to pay on a gifted vehicle?
In Ontario, there is no gift tax when gifting a car to a family member. However, this does exist in places like the United States.
It’s important to remember that until the vehicle transfer process is completed by the buyer at Service Ontario, it will remain registered in your name and any legal liability, for it remains with you. To ensure a smooth transfer of car ownership in Ontario, follow up with buyers to ensure they have successfully registered the car. Be sure to also keep records for future reference. Always check in with your isure broker before entering into a private sale or gifting of a vehicle to ensure you have all the relevant information and facts!
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