1 Purchase Details
⚖️ Dealership vs Private Sale — Comparison▼
Side-by-Side Comparison
| Factor | Dealership | Private Sale |
|---|---|---|
| Tax rate | 13% HST | 13% RST |
| Tax base | Purchase price | Greater of price or Red Book |
| Paid at | Dealership | ServiceOntario |
| Red Book required | No | Yes (used to verify value) |
| Trade-in credit | Yes | No |
| Sub-$1,000 exception | N/A | Yes |
When Each Applies
- Dealership — you buy from an OMVIC-registered dealer. The dealer collects HST at the point of sale.
- Private Sale — you buy from an individual. You pay RST at ServiceOntario when registering.
Payment Timing
At a dealership, HST is part of the purchase transaction. On a private sale, you pay the seller only the agreed price, then pay RST separately at ServiceOntario within 6 days of the sale.
📖 How the Greater-Of Rule Works▼
The Rule Explained
Ontario requires RST to be paid on the greater of:
- (a) The purchase price actually paid to the seller
- (b) The Canadian Red Book wholesale value
This rule prevents buyers from declaring an artificially low price to reduce their tax bill.
Worked Example
You buy a used car privately for $8,000:
Even though you paid only $8,000, you still pay RST on the $12,000 Red Book value.
Sub-$1,000 Exception
If both the purchase price AND the Red Book value are under $1,000, RST is charged on the actual purchase price — no appraisal needed.
What If You Paid More Than Red Book?
If you paid $15,000 for a car whose Red Book value is $12,000, you'd pay RST on the $15,000 purchase price (the greater of the two).
📋 What You Need at ServiceOntario▼
Required Documents Checklist (Private Sales)
- Signed bill of sale — from the seller, showing the purchase price
- Vehicle permit (green ownership) — signed by the seller in the "transfer" section
- Used Vehicle Information Package (UVIP) — mandatory for all private vehicle sales in Ontario
- Safety Standards Certificate — required if you want to plate the vehicle
- Proof of insurance — valid Ontario auto insurance
- Payment for RST + registration fees — cheque, debit, or credit
Where to Go
Visit any ServiceOntario centre. Find one near you at ontario.ca/page/serviceontario.
Deadline
You must register the vehicle and pay RST within 6 days of the sale.
Disputing the Red Book Value
If you believe the Red Book value is inaccurate (due to damage, high mileage, etc.), you can request a formal appraisal at your own cost.
2 Frequently Asked Questions
How much is tax on a used car in Ontario?
Ontario charges 13% tax on used car purchases. At a dealership, it's 13% HST paid at the dealer. On a private sale, it's 13% RST paid at ServiceOntario when you register the vehicle.
Do I pay HST or RST on a private sale?
Private used car sales in Ontario use RST (Retail Sales Tax) at 13%, paid at ServiceOntario when you register the vehicle — not to the seller.
What if I paid less than the Red Book value?
Ontario uses the GREATER of the purchase price or the Red Book wholesale value. If you paid less than the Red Book value, your RST is calculated on the higher Red Book value.
Can I use a lower declared price?
No. Ontario's greater-of rule uses the Red Book value to prevent under-reporting. If the Red Book value is higher than the price you declared, you'll pay RST on the Red Book value.
Does GST/HST apply to private sales?
No. Private used car sales in Ontario do not involve GST/HST. Only the 13% RST applies, paid at ServiceOntario.
When do I pay the tax?
At a dealership, HST is paid when you complete the purchase. On a private sale, RST is paid at ServiceOntario when you register the vehicle in your name (within 6 days of the sale).
What is the sub-$1,000 exception?
If BOTH the purchase price and the Red Book value are under $1,000, Ontario charges RST on the actual purchase price without requiring an appraisal.
3 Official Resources
Phone: 1-800-267-8097
Verify all rates and rules with ServiceOntario before registering your vehicle.
⚠️This tool is for information purpose only. We do not guarantee any claim.
It is made based on data publicaly available on official website of concerned department.
Last Updated: March 2026 | Official Determination Required