Gifting a Car in Ontario: Everything You Need to Know

If you’re wondering how to gift a car in Ontario, whether to help out a family member or pass along a vehicle you no longer need, the good news is that it’s easier—and more tax-friendly—than most people think. For eligible family members, a gifted car can mean skipping the 13% retail sales tax (RST) that’s normally owed during a vehicle transfer.

That said, the process does involve a few important steps and documents to make the transfer official and tax-exempt. This guide will walk you through who qualifies, what paperwork is required, and how to complete the ownership transfer smoothly at ServiceOntario.

Who Can Receive a Gifted Car in Ontario?

In Ontario, you can only gift a vehicle—meaning transfer ownership without charging retail sales tax (RST)—to certain family members, as defined by ServiceOntario. These include both blood relatives and family through marriage or adoption:

• Spouse or common-law partner
• Parent or step-parent
• Grandparent or step-grandparent
• Child or step-child
• Grandchild or step-grandchild
• Sibling, half-sibling, or adopted sibling
• In-laws (parent-in-law, child-in-law, sibling-in-law)

As long as the recipient falls into one of these categories, they’ll be exempt from paying the 13% RST typically applied to vehicle transfers.

If you’re planning to give a car to a friend or non-family member, the process works much like a private sale. The recipient will need to pay RST based on the vehicle’s Canadian Red Book value, even if no money changes hands.

Why Gift a Car Instead of Selling It?

Gifting a car to a family member in Ontario isn’t just a kind gesture—it can also come with some real financial and practical advantages.

No retail sales tax (RST)

When you gift a vehicle to an eligible family member, they don’t have to pay the 13% RST that’s normally required when transferring ownership. That can mean thousands in savings—especially on newer or higher-value vehicles.

No gift tax in Canada

Unlike the U.S., Canada has no federal or provincial gift tax. So you don’t need to worry about paying tax on the act of giving a vehicle, regardless of its value.

Less hassle than selling privately

Avoid the back-and-forth of private sales, including haggling, lowball offers, and meeting with strangers. Gifting is often a faster, safer, and more straightforward way to pass on a vehicle you no longer need.

A real helping hand

Whether it’s a student heading off to school, a new parent juggling expenses, or a retired family member on a fixed income, gifting a car can make a big impact—without creating a financial burden.

Things to Consider Before Gifting a Car

Before you start filling out forms or handing over keys, there are a few important things to keep in mind to make sure gifting your car is the right move—for both you and the recipient.

The vehicle must be fully paid off

You can’t transfer ownership of a vehicle that still has a loan or lien on it. If your car is financed, you’ll need to pay it off in full and obtain a lien release from your lender before it can be gifted.

Can the recipient afford to own a car?

Even though the car is free, the ongoing costs of ownership are not. Make sure the recipient is financially prepared for the following:

• Insurance – A new policy will be required before they can register the vehicle
• Registration and licensing fees – These apply even during a gift transfer
• Maintenance and fuel – Regular servicing, repairs, and day-to-day driving costs add up
• Parking or storage – Particularly in urban areas, this can be a major expense

It’s a good idea to have an open conversation with the recipient beforehand—especially if they’re a student, recently unemployed, or on a tight budget. A car is a generous gift, but it comes with responsibilities.

Step-by-Step: How to Gift a Car in Ontario

Gifting a car in Ontario is a relatively straightforward process—but it does involve a few key steps and documents to make the transfer official and tax-exempt. Here’s how to do it properly:

1. Pay off any remaining car loan

You must fully own the vehicle before transferring it. If there’s an outstanding loan, pay it off and request a lien release from your lender.

2. Get car insurance in the recipient’s name

The recipient must have valid Ontario auto insurance before they can register the vehicle. Make sure their policy is active before visiting ServiceOntario.

3. Complete a Sworn Statement for a Family Gift

This form confirms that the transfer is a gift between eligible family members. Both you and the recipient must sign it in front of a lawyer or notary public.

4. Provide a Safety Standards Certificate (SSC)

Unless you’re gifting the vehicle to your spouse, a valid SSC is required to prove the vehicle meets minimum safety standards. You can get this at any licensed inspection station in Ontario.

5. Fill out the vehicle ownership permit

On the back of the green ownership permit, complete the transfer portion. This updates the vehicle’s registration from your name to the recipient’s.

6. Complete the Plate Transfer Declaration (if applicable)

If you’re transferring plates to a spouse, parent, or child, you’ll need to fill out this form. Plates can’t be transferred to other family members.

7. Bring everything to a ServiceOntario centre

Once you’ve completed the above steps, head to your nearest ServiceOntario location with all the required documents (we’ll cover the full checklist in the next section).

Quick Checklist: What to Bring to ServiceOntario

Once you’ve followed the steps above, here’s a simple checklist to make sure you don’t forget anything on the day of the transfer:

• Driver’s licences (for both you and the recipient)
• Proof of insurance (in the recipient’s name)
• Sworn Statement for a Family Gift (signed in front of a lawyer or notary)
• Vehicle ownership permit (green registration paper with transfer section filled out)
• Safety Standards Certificate (or Spousal Declaration, if gifting to a spouse)
• Plate Transfer Declaration (if transferring plates to a spouse, parent, or child)
• Payment method ($32 for the permit, plus $27 if new plates are needed)

Pro Tip: Bring everything in a folder to make the ServiceOntario visit quick and stress-free.

Is Gifting a Car in Ontario Right for You?

Gifting a car in Ontario is a generous and practical way to support a family member—especially when it means skipping the 13% retail sales tax and avoiding the hassle of a private sale. As long as the recipient is an eligible family member and the vehicle is fully paid off, the process is surprisingly straightforward.

Just remember to prepare the necessary documents, consider the ongoing costs of ownership for your recipient, and visit a ServiceOntario location to make the transfer official.

Not sure if gifting is the right move?

You can also sell your vehicle to Clutch in just a few clicks. We’ll give you a firm offer online, handle pickup or drop-off, and save you the time and effort of dealing with private buyers.

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