Selling out of province
Thanks to the internet, dealers are selling more and more vehicles to residents of other provinces.
Sometimes, the purchaser will travel to Ontario to buy the vehicle and drive it back home.
It’s also common for a vehicle to be sold without ever meeting the purchaser face to face, with the bill of sale being signed by fax and the vehicle being shipped to the out-of-province purchaser.
The process to transfer the registration of the vehicle will be different in each scenario.
If the purchaser wants to drive the vehicle home, the Dealer should obtain a Special Permit The purchaser will need to provide proof of insurance in order for the Special Permit to be issued. The Permit goes in the windshield of the vehicle. The vehicle registration permit, in the dealer’s name, must be signed on the back by the dealer and the customer drives back to their home province that way.
Once the Special Permit is issued, the purchaser has ten days to drive the vehicle home and register it in their home province.
If the purchaser is not coming to Ontario, it usually won’t be possible to register the vehicle into the buyer’s name in Ontario. In that case, simply sign off on the Ontario registration permit and send it to the buyer with the vehicle so they can register the vehicle in their home province. Then change the vehicle’s Ontario registration status at the licence office to “SOLD” status.
Put simply:
If delivery takes place in Ontario, then 13% HST will apply to the sale, regardless of where the customer lives.
If delivery takes place outside of Ontario, the tax applicable to that province should be charged.
Delivery takes place where the customer is considered to take possession of the vehicle.
- If the customer picks the vehicle up in Ontario and drives it home, delivery takes place in Ontario
- If the vehicle is shipped out-of-province with the buyer shown as consignor on the bill of lading, delivery takes place in Ontario. It does not matter who actually pays the shipping invoice.
- If the vehicle is shipped out of province with the selling dealer shown as consignor on the bill of lading, then delivery takes place in the destination province. It does not matter who actually pays the shipping invoice.
Some provinces have different federal tax rates from Ontario. Here’s a summary of GST and HST rates in all Canadian jurisdictions:
Nova Scotia 14
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
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.
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.