Taxes on used motorcycle | GTAMotorcycle.com

Taxes on used motorcycle

Ghostrider619

Well-known member
Hello, back then I bought my bike from a private seller, he put the amount as $1000 although I bought it for $3000. I ended up paying taxes for the $1000 with no issue. I heard now I need to sign a different form so I pay the actual tax ? Or can the seller still put whatever amount for the value of the bike being sold.
 
On bikes you pay tax based on the bill. Occasionally, they send a letter to the seller asking them to confirm price. As the seller obviously understands the game, this letter will get thrown in the garbage with no repercussions.

You've already done the deed, don't make a mess of it now. Enjoy the bike and don't raise problems with the licensing office.
 
Last time I bought used bike the seller made me a bill of sale. The amount was the actual blue book value of that motorcycle ... I paid taxes on that. I wouldn't suggest going crazy and claiming let's say $1000 sale on $7000 actual value, this might raise some red flags.
 
Last time I bought used bike the seller made me a bill of sale. The amount was the actual blue book value of that motorcycle ... I paid taxes on that. I wouldn't suggest going crazy and claiming let's say $1000 sale on $7000 actual value, this might raise some red flags.

They don't look at book value for bikes in Ontario. I am not sure if the letter to the seller gets generated based on difference between book and sale prices or if it just a lottery. For cars, if your bill of sale is substantially under book value, they want you to pay tax on the higher value (unless you have an appraisal that says otherwise).

I don't know what happens if the seller was dumb enough to reply to the letter saying that the bike was sold for a different price. The seller signed the bill of sale too so I'm not sure if the government would be happy collecting the tax, if there was some form of penalty or if they bothered notifying law enforcement (or cra?).

In any case, he's already transferred the bike. Going back now would make a mess.
 
There's no such thing as "blue book" for bike values according to the MTO.

The tax you pay is based on the number written down on the bill of sale.
 
Hello, back then I bought my bike from a private seller, he put the amount as $1000 although I bought it for $3000. I ended up paying taxes for the $1000 with no issue. I heard now I need to sign a different form so I pay the actual tax ? Or can the seller still put whatever amount for the value of the bike being sold.
Seriously?
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maybe OP is just a stand up dude that doesn't like to cheat?

not paying the true tax amount is against the law, so why mock him?
 
You can either put the true cost on the form or lie.

Once enough people are stealing from them,
the government will justify doing something extremely costly about it.
They hate competition!
 
Stealing lol. They got paid plenty of tax money on the original dealer sale. Wtf should anyone feel bad not giving them $$ repeatedly for the same vehicle?

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Stealing lol. They got paid plenty of tax money on the original dealer sale. Wtf should anyone feel bad not giving them $$ repeatedly for the same vehicle?

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Then they got a smaller amount the next time the bike got resold, then again with the 3rd seller. Some bikes have generated more in tax revenue than they actually cost.

There are two things I have no "moral" issues with, ride the 407 and not pay and paying less tax on a purchase of something that has already paid taxes when purchased multiple times.
 
They tax on a private sale cause they can. Considering the billions they waste, saving a few bucks on something that should not be taxed is nothing.
 
maybe OP is just a stand up dude that doesn't like to cheat?

not paying the true tax amount is against the law, so why mock him?

Because taxing the same item over and over and over and over again is complete ********, not to mention sketchy AF. Think about it, in the lifetime of a small CBR or Ninja beginner bike, that changes hands every season, the province will make way more on that bike than the original MSRP. Or worse yet, a gixxer that changes hands every season because people keep buying them before finding out they can't insure them.
 
Yes it does, because bikes don't have book value. They have to take your word for it. This is from recent experience btw.
 
Normally I'm a pretty law abiding guy, but when it comes to this BS.... Taxing on used stuff sold privately I say screw them as much as you can.
It's a scam and a tax grab.
Tge only reason they get away with it is because they know when a vehicle changes hands... Because they're all registered...
 
x2 there is still no book value for a lot of recreational vehicles like motorcycles, RV's, etc. Whatever is on the receipt is what you pay.

Try to keep it within reason (don't put $100 for that $20,000 Harley you just bought) and most of the time nobody bats an eye.

As for the legality/moraility, well...that's each individuals decision. Unfortunately as someone mentioned, the people who DO put $100 for that $20,000 Harley and then laugh at it are the ones who will end up with the government changing the process eventually. Yeah, I too don't agree with the process of collecting taxes on a vehicle over and over and over again, but like it not, since it is the process, we'd all be well served to not do anything that will cause it to be tightened.
 
If you wish to get mad at something, how about this.
In 2000 the original owner bought the bike from a dealer for a certain amount and paid PST on that amount.
In 2005 he sold the bike for a lower amount and the 2nd owner paid PST on that amount.
In 2010 he sold the bike to the third owner and that owner now had to pay HST.
In 2015 the fourth owner had to pay the HST again.
That's the same vehicle being taxed four times.
And we just put up with it.
 
You can either put the true cost on the form or lie.

Once enough people are stealing from them,
the government will justify doing something extremely costly about it.
They hate competition!

Once the government started stealing even more of MY money in form of a fake HST on used vehicles (there's no HST, it all goes to the province) I stopped caring.
Your argument has always been - bend over because if you don't bend over, they'll ram an even bigger one up in there eventually. I don't subscribe to that point of view.

"The taxes on private sales of used cars in most of Canada are entirely provincial levies and have nothing to do with the GST or HST. In fact, these private sales are exempt from the federal part of the HST, just as they had been under the GST. HST applies to the purchase of any new vehicle, and that tax is part of the value upon any subsequent resale.

Moreover, the taxes on private sales of cars differ from the HST in that they apply to transfers rather than to consumption. They penalize the private exchange of used vehicles rather than consumption of their services — which simply shift to another owner. A car that is resold multiple times bears tax each time, whereas a single-owner car bears it just once.


The Ontario Finance Ministry justified hiking the transfer tax rate as needed to “help ensure a level playing field between used vehicles sold through dealerships and private sales.”

Yet contrary to governments’ claims of creating a level playing field between dealers and private sellers, raising the tax rate on private sales did exactly the opposite. It widened a pre-existing bias that gave a competitive advantage to car dealers versus private sellers.


When a dealer takes a trade-in vehicle as part of a new car sale, HST is imposed on only the net price — the new car price minus the trade-in allowance. HST then applies to the sale of that used car by the dealer, but the treatment of the trade-in means that tax in effect is borne by just the dealer’s markup and not the full sale price.


In contrast, a private seller of an identical used vehicle must charge the transfer tax on the car’s full sale price. That tax is borne by the buyer and seller, whereas the same car passing through a dealer would bear tax on only the markup. This tax also discourages private sellers from making repairs on vehicles prior to sale, since those costs bear tax twice.


By biasing the mode of exchange — favouring the channel that has higher overhead costs in the form of advertising, showroom, sales and office staff—the transfer tax impedes economic efficiency. The transfer tax also deters efficient exchanges even when the prospective purchaser values a car by up to 12% more than the current owner.


Adding injury to insult, the transfer tax on private sales falls disproportionately on lower- and moderate-income households. Those groups are the main purchasers in the private market for used cars; high-end cars owned by high earners are more typically used as trade-ins for new cars and thus benefit from the preferential tax treatment."
 

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