Purchase of a Used Road Vehicle from an Individual

Calculating the GST

The GST does not apply on the purchase of a used road vehicle from an individual who is not registered for the GST.

Calculating the QST

A person that purchases a used road vehicle registered under the Highway Safety Code from an individual who is not registered for the QST must pay the QST to the Société de l'assurance automobile du Québec (SAAQ) when registering the vehicle.

The QST is calculated on the higher of the following two amounts:

Transactions between related individuals

When a used road vehicle is transferred between related individuals for a price that is lower than the estimated value (transaction with or without consideration), the QST is calculated on the sale price agreed upon by the parties.

Example of the calculation for an individual not registered for the GST and QST who sells a used vehicle to another individual

An individual sells a used vehicle to another individual for $10,000. The average wholesale price of the vehicle is $13,000 from which $500 is subtracted, giving an estimated value of $12,500. Neither individual is engaged in commercial activities.

QST payable ($12,500 x 9.75%)$1,246.88
Sale price$10,000.00
Estimated value$12,500.00

The GST does not apply in this case because the sale involves two individuals making a non-commercial transaction. The QST applies, however, and must be calculated by the SAAQ on the estimated value since it is greater than the sale price. The vendor, a non-registrant, is not required to calculate the amount of QST payable by the buyer.

Collecting the QST

The Société de l'assurance automobile du Québec (SAAQ) always collects the QST when a road vehicle is registered. Note that an individual who is not registered for the QST is not authorized to collect the QST.

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