Gifting a car to an immediate family member in Ontario is one of the few vehicle transfers that’s exempt from the province’s 13% Retail Sales Tax (RST) — and it’s often the cheapest alternative to having the recipient take out a car loan of their own. To qualify, both parties must complete the right forms, meet the eligibility rules, and register the transfer at ServiceOntario within the required timeframes.
This guide walks you through who qualifies as “family,” every document and fee involved in 2026, how to handle leased or financed vehicles, and what the recipient needs to do to insure and register the car legally.
Key Points
Key Points
1. Immediate family members (spouse, parent, child, sibling, grandparent, in-law) can receive a gifted vehicle exempt from Ontario’s 13% RST — but only once per vehicle every 12 months.
2. The donor must own the car outright (no liens, no active lease) and provide a Used Vehicle Information Package (UVIP, $20). The recipient must complete a notarized Sworn Statement for a Family Gift (Form 1157E).
3. A Safety Standards Certificate ($60–$200) is required for every transfer except spouse-to-spouse, which uses a Spousal Declaration (Form 1155E) instead.
4. Once registered, the new owner is on the hook for insurance — averaging $2,164 per year in Ontario as of October 2025 (FSRAO).
Who Can You Gift A Car To In Ontario Without Paying Tax?
Ontario treats a vehicle transfer between immediate family members as a personal favour rather than a sale, which is why no Retail Sales Tax is charged. Only one RST-exempt transfer of the same vehicle between family members is allowed in any 12-month period — so you can’t, for example, gift the car to your daughter and then have her gift it to her brother tax-free a few months later.
Eligible Family Members (RST Exempt)
- Spouse (including common-law)
- Parent or step-parent
- Child or step-child
- Sibling, half-sibling, or adopted sibling
- Grandparent or step-grandparent
- Grandchild or step-grandchild
- Parent-in-law, son-in-law, or daughter-in-law
Who Does Not Qualify
Transfers to aunts, uncles, cousins, nieces, or nephews are not RST-exempt, even though they’re often considered “close family” in everyday language. Those recipients pay 13% RST based on the vehicle’s wholesale value (per the Canadian Red Book) or its purchase price — whichever is higher.
What’s The Retail Sales Tax On A Gifted Car In Ontario?
If you transfer a vehicle to anyone outside the eligible family list, the recipient pays 13% RST on the Red Book value at the time of registration. RST is paid directly to ServiceOntario when the new owner registers the vehicle — not to the previous owner.
Eligible family transfers, by contrast, pay $0 RST when the Sworn Statement for a Family Gift (Form 1157E) is properly completed and submitted.
How To Gift A Car In Ontario: A Step-By-Step Guide
Step 1: Confirm The Car Is Eligible To Be Gifted
The donor must own the vehicle outright. You cannot gift a car with an outstanding loan or an active lease (more on both below). If there’s a lien on the title, it must be cleared before the transfer can proceed.
Step 2: Gather The Paperwork
The donor purchases the Used Vehicle Information Package (UVIP) for $20 from ServiceOntario — available online (mailed in ~5 business days) or in person same-day. Both parties also need a valid Ontario driver’s licence, the original vehicle ownership permit, and proof of the recipient’s insurance.
Step 3: Sign The Sworn Statement For A Family Gift
Both the donor and recipient must complete Form 1157E (Sworn Statement for a Family Gift of a Used Motor Vehicle). The form must be commissioned by a notary public or commissioner of oaths. Since September 2020, the Ontario government accepts electronically signed copies, so the form can be completed remotely through services like NotaryPro or similar online notary platforms.
For spouse-to-spouse transfers, use Form 1155E (Spousal Declaration) instead.
Step 4: Get A Safety Standards Certificate (Or Spousal Declaration)
A Safety Standards Certificate (SSC) is mandatory for every family transfer except spouse-to-spouse. The inspection is performed at a DriveON-authorized inspection centre licensed by the Ministry of Transportation. Costs range from $60 to $200 depending on the shop and vehicle. The certificate is valid for only 36 days from the date the vehicle passes — so coordinate the inspection close to the registration date.
Step 5: Set Up Insurance For The Recipient
The new owner must have their own insurance policy in their own name before driving the car. If the recipient already has an active Ontario auto policy, they have a 14-day grace window to add the new vehicle to their existing policy after registration.
Step 6: Transfer The Licence Plates (Or Buy New Ones)
If you’re transferring your existing plates to an eligible family member, complete Form 023-sr-lv-139 (Plate Transfer Declaration). Otherwise, the recipient buys a new standard licence plate (typically $59, within a broader range of $15–$300 depending on plate type). Note: passenger vehicle plate sticker renewals have been free in Ontario since March 13, 2022 — so there’s no recurring sticker cost for the new owner.
Step 7: Register The Transfer At ServiceOntario
Bring all paperwork (UVIP, Sworn Statement, SSC or Spousal Declaration, signed ownership permit, plate declaration if applicable, driver’s licences, proof of insurance) to any ServiceOntario centre. The recipient pays the $32 vehicle permit fee to finalize the transfer. The recipient has 6 days from the bill-of-sale date to register the gifted car in their name.
Documents Required To Gift A Car In Ontario
| Document | Form # | Who Provides It | Purpose |
|---|---|---|---|
| Used Vehicle Information Package (UVIP) | — | Donor ($20) | Mandatory disclosure of vehicle history, liens, registration |
| Sworn Statement for a Family Gift | 1157E | Both parties (notarized) | Certifies the transfer is a gift; unlocks RST exemption |
| Spousal Declaration (spouse-to-spouse only) | 1155E | Both parties | Replaces the SSC requirement for spouses |
| Safety Standards Certificate (SSC) | — | Donor (DriveON inspection) | Required for all transfers except spouse-to-spouse |
| Plate Transfer Declaration | 023-sr-lv-139 | Both parties | Required if transferring existing plates to eligible family |
| Vehicle Ownership Permit (back portion completed) | — | Donor | Transfers legal ownership |
| Proof of Ontario Auto Insurance | — | Recipient | Required before driving and at registration |
| Ontario Driver’s Licence (both parties) | — | Both | ID verification at ServiceOntario |
Many of these documents — particularly the UVIP and Safety Standards Certificate — overlap with what’s required when privately buying a used vehicle in Ontario, so the process will feel familiar to anyone who’s gone through a private sale.
How Much Does It Cost To Gift A Car In Ontario In 2026?
Even though the gift itself is free, both parties will rack up some costs to complete the transfer legally.
| Cost | Amount (2026) | Who Pays |
|---|---|---|
| Used Vehicle Information Package (UVIP) | $20 | Donor |
| Safety Standards Certificate | $60 – $200 | Donor (typically) |
| Notary fee for Sworn Statement | $25 – $75 | Either |
| Vehicle permit / registration fee | $32 | Recipient |
| New licence plate (if not transferring) | $59 (standard) | Recipient |
| Plate sticker renewal (annual) | $0 | Recipient |
| Retail Sales Tax | $0 (eligible family) / 13% of Red Book value (non-eligible) | Recipient |
For most eligible family transfers, expect total out-of-pocket costs of roughly $135 to $390, before the recipient’s insurance kicks in.
Can You Gift A Car That Isn’t Paid Off?
No. A vehicle with an outstanding loan or any lien on the title can’t be transferred until the balance is paid and the lien is cleared. You have a few options:
- Pay off the loan in full before initiating the transfer.
- Refinance into the recipient’s name — effectively a sale, not a gift, and 13% RST will apply unless the recipient also qualifies for the family exemption.
- The recipient takes out a no-down-payment car loan to cover the remaining balance, then receives the now-clear title as a gift.
A lender or ServiceOntario will not register a transfer with an active lien on file.
Can You Gift A Leased Car?
Not directly, because a leased car is owned by the leasing company — not by the person driving it. You have two paths:
Lease Takeover
The recipient takes over the remaining lease payments. Not every lessor allows this, and most charge a lease transfer fee of $300 to $800. The new lessee must pass a credit check, which can be tough for younger family members still building credit history.
Lease Buyout
The donor (or recipient) pays the lease’s residual value to take ownership of the vehicle outright. Early termination fees range from $200 to $500, plus any condition or mileage adjustments. Once the buyout is complete and the donor holds clear title, the vehicle can be gifted normally.
How To Insure A Gifted Car In Ontario
Every Ontario driver is legally required to carry auto insurance, and the recipient of a gifted car needs a policy in their own name — being listed as a secondary driver on the donor’s policy doesn’t transfer.
According to the Financial Services Regulatory Authority of Ontario (FSRAO), the average Ontario auto insurance premium was $2,164 per year ($180/month) as of October 2025 — up from roughly $1,737 just two years earlier. Premiums vary significantly by:
- Driver age and history — young or newly licensed drivers (often first-time car owners) pay more
- Postal code — GTA drivers averaged around $2,638; rural Ontario drivers averaged $1,592
- Vehicle make, model, and year — sportier or theft-prone vehicles cost more
- Coverage level and deductibles
If the recipient already has an active Ontario auto policy, they have 14 days after registering the gifted vehicle to add it to their existing coverage. Otherwise, they need a binder of insurance in place before the transfer is registered at ServiceOntario.
Transferring A Car During Separation, Divorce, Or Death
Family circumstances can complicate a vehicle transfer. Here’s what’s required in two common scenarios.
Separation Or Divorce
A transfer between separated or divorced spouses is still RST-exempt, but you’ll need additional documentation — typically a separation agreement, divorce decree, or court order in addition to the Sworn Statement. If no formal document exists yet, both parties can sign a notarized statement attesting to the arrangement.
Death Of The Vehicle Owner
When the registered owner has died, the vehicle passes through their estate. The recipient (usually a surviving family member named in the will) will need:
- A certified copy of the death certificate
- A certified copy of the will (or letters of administration if there’s no will)
- A Certificate of Appointment of Estate Trustee if the estate has been probated
- The completed Sworn Statement for a Family Gift, signed by the estate trustee on behalf of the deceased
What Happens When You Win A Car In Canada?
Unlike in the United States, lottery and contest winnings in Canada — including cars — are not taxable income. The Canada Revenue Agency treats prize cars as windfalls. That said, the winner is still responsible for:
- Registering the vehicle and paying the $32 permit fee
- Getting it insured (subject to the same average premiums above)
- Maintenance, fuel, and any optional add-ons
There is one tax wrinkle: if you later sell the prize car for more than its fair market value at the time of winning, the gain may be a taxable capital gain. In practice, depreciation usually makes this a non-issue.
Gifting A Car In Ontario: FAQ
Where Do You Register A Gifted Car In Ontario?
Does The Person Gifting The Car Have To Pay Taxes?
Is It Better To Sell Or Gift A Car To A Family Member?
Do You Need A Safety Standards Certificate To Gift A Car?
How Long Do You Have To Register A Gifted Car In Ontario?
Can You Gift A Car To Someone In Another Province?
References
- Financial Services Regulatory Authority of Ontario. (2025). Your average premium. https://www.fsrao.ca/consumers/auto-insurance/understanding-auto-insurance-rates/your-average-premium
- Government of Ontario. (2024). Transfer ownership of a vehicle to a family member. https://www.ontario.ca/page/transfer-ownership-vehicle-family-member
- Government of Ontario. (2025). Driver and vehicle fees. https://www.ontario.ca/page/driver-and-vehicle-fees
- Government of Ontario. (2025). Used Vehicle Information Package. https://www.ontario.ca/page/used-vehicle-information-package
- Government of Ontario. (2025). Safety Standards Certificate. https://www.ontario.ca/page/safety-standards-certificate
- Ministry of Government and Consumer Services. (2024). Sworn Statement for a Family Gift of a Used Motor Vehicle (Form 1157E). https://forms.mgcs.gov.on.ca/en/dataset/013-1157
