Car registered in Mississauga - Toronto Car Tax?

[halo five]

Hi, a friend is moving to Toronto and looking for some insurance insight and I didn't have the answer for them.

She's moving from Mississauga and taking her parent's car with her. The parent is not transferring ownership of the vehicle, it's just an extended loan. She'll be insuring the vehicle in Toronto under a Toronto address, so all legit and above-board there.

However, with respect to the Toronto vehicle tax, since the vehicle's ownership is not changing hands, will she have to pay the Toronto vehicle tax? Is there anything illegal about insuring a vehicle that's on loan to you, that you don't personally own?

She wants to "do the right thing" and not get denied coverage for something as minor as a $60 surcharge. But, she doesn't want to have to go through the taxation trouble of transferring the vehicle's ownership to her if she doesn't have to.

Any help appreciated!

[labenge]

The tax is paid by Toronto residents who own or lease a car. She'll be a Toronto resident, but she doesn't own or lease the car - so the PVT won't apply.

http://www.toronto.ca/finance/revenue_tools.htm#pvt

[halo five]

Thanks for the quick reply. The Bel Air online quote generator is saying she has to be the owner or lessee to be insured. Looks like she might have to transfer the ownership anyway.

[Tijuana]

Thanks for the quick reply. The Bel Air online quote generator is saying she has to be the owner or lessee to be insured. Looks like she might have to transfer the ownership anyway.

If the car is registered under her parents and they pay insurance, then your friend technically doesnt even need insurance. if she is paying then she will most likely be a 2nd driver and so on, so she doesnt need to be registered on the car.

[halo five]

Sure, but that's insurance fraud. She'll be the primary driver and has to disclose herself as such. If she gets in an accident the insurance company can (and definitely will) refuse coverage because she gave false information.

She's called a few places, bel air direct for one I think, and they won't insure you unless you're the primary driver and own/lease the vehicle.

[User Name]

I think what Tijuana meant is get the parents to add her name to their insurance as a secondary driver. If she ever does get into an accident, who's to say she didn't just go to her parents house and borrow the car that day. As long as she is on record as insured under that policy, it will pay out.

If you really insist on transferring ownership and then getting her own insurance, why not do the transfer while she is still living in Mississauga thus avoiding the toronto tax.

She will have to pay tax (GST/PST) on the MTO's book value for the car when she registers the title though. They charged my friend when his parents gave him their truck.

If the car is registered under her parents and they pay insurance, then your friend technically doesnt even need insurance. if she is paying then she will most likely be a 2nd driver and so on, so she doesnt need to be registered on the car.

Sure, but that's insurance fraud. She'll be the primary driver and has to disclose herself as such. If she gets in an accident the insurance company can (and definitely will) refuse coverage because she gave false information.

She's called a few places, bel air direct for one I think, and they won't insure you unless you're the primary driver and own/lease the vehicle.

[rogerrabbit168]

She will have to pay tax (GST/PST) on the MTO's book value for the car when she registers the title though. They charged my friend when his parents gave him their truck.

she shouldn't have to pay any taxes (GST/PST) if its transfer from her parents. when my dad gave me his car, i didn't pay anything.

here is the direct link to MTO's exemption

http://www.mto.gov.on.ca/english/dandv/vehicle/used.shtml#tax

Tax exemption
You do not have to pay retail sales tax if:

You are a qualifying Diplomat or Status Indian. You can complete a transfer by showing your identity card.
You receive a vehicle as a gift from a close family member, such as:
Spouse
Parent or step-parent
Grand-parent
Son or step-son
Daughter or step-daughter
Grandson or granddaughter
Step-grandson or Step-granddaughter
Son-in-law
Daughter-in-law
Father-in-law
Mother-in-law
Note: Only one tax-free transfer per vehicle is allowed every 12 months within your close family.

For some transfers, such as gifts between close family members (describe above), are sales tax exempt if a Sworn Statement for a Family Gift of a Used Motor Vehicle in the Province of Ontario is provided when registering your vehicle at a ServiceOntario Driver and Vehicle Licence Issuing Office.

[lagos]

Just tell her to be secondary on the parents insurance. Don't listen to people who says it is fraud. Tens of Thousands of people do it this way for god sakes.

[HolyPotato]

To stay on the up-and-up she should be insured through her parents insurance, as the primary driver on that car, with a garaging address of her place in Toronto.

I did this for a while after moving to London (with the car still registered to my parents in Toronto) -- you can have a different garaging address from the registration.

(This was with Chubb Insurance, in case that's a company-specific option).

[Skirby01]

Just tell her to be secondary on the parents insurance. Don't listen to people who says it is fraud. Tens of Thousands of people do it this way for god sakes.


Yes...that's a great way to 1) save money 2) get your claim denied 3) get cancelled for misrepresentation and 4) have to goto facility insurance for years after getting caught

What she should do is A) let her parents keep the ownership but make sure they insure it with her as the principle operator registered to the Toronto address (and pay the extra tax) or B) transfer the ownership to her, save the tax and she can insure it herself