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Do You Pay Tax on a Used Boat in Ontario?

Jun 30, 2024 | Blog

If you’re considering purchasing a used boat in Ontario, you might be wondering about the tax implications. Do you pay tax on a used boat in Ontario? This question is crucial for budgeting and planning your purchase. In this guide, Canada Powersports Financing, a provider of boat loans in Canada, will explain everything you need to know about the taxes involved in buying a used boat in Ontario.

Understanding Ontario Boat Tax

Do you pay tax on a used boat in Ontario? Yes, you do. Here’s a breakdown of the main taxes and fees:

  • Retail Sales Tax (RST): You must pay RST when buying a used boat from a private seller. This tax is typically 13% of the purchase price.
  • Harmonized Sales Tax (HST): If you buy a boat from a dealer, you’ll pay used boat sales tax, which combines the federal Goods and Services Tax (GST) with the provincial RST, totaling 13%.
  • Boat Registration Fees: On top of sales tax, you need to pay Ontario boat registration tax for your boat, which varies based on the size and type of vessel.
  • Ontario Used Boat Fee: This additional fee may apply depending on the boat’s specifications and where you purchased it.

How To Handle Taxes When Buying a Used Boat

Understanding the process of paying taxes when buying a used boat in Ontario is essential. Here are the steps you need to follow:

  1. Calculate the Purchase Price: Determine the total purchase price of the boat, including any additional equipment or accessories.
  2. Determine the Applicable Tax: If buying from a private seller, apply the RST. For dealer purchases, apply the HST.
  3. Complete the Bill of Sale: Ensure the bill of sale includes all necessary details, such as the purchase price, seller and buyer information, and the boat’s description.
  4. Register the Boat: Complete the registration process with Transport Canada. You can find more information in the boating safety tips document provided by Transport Canada.
  5. Pay the Tax: Submit the required tax payment during the registration process.

Tips for Reducing Your Ontario Marine Tax

Although taxes are inevitable, there are ways to minimize your Ontario marine tax liability. Here are some tips to consider:

  • Negotiate the Purchase Price: A lower purchase price means lower taxes. Negotiate with the seller to get the best deal.
  • Buy from a Private Seller: Since RST is typically lower than HST, buying from a private seller can save you money.
  • Look for Tax-Exempt Boats: Some boats may be exempt from taxes if they meet certain criteria. Check with Ontario’s tax authority for more details.

Canada Powersports Financing Explains Used Boat Tax in Ontario

Do you pay tax on a used boat in Ontario? Yes, you do, and knowing the details helps you budget accurately.

At Canada Powersports Financing, we specialize in helping you navigate these financial waters smoothly. If you need a license for a personal watercraft or other services, we’ve got you covered. Call us at (437) 900-0010 to learn more about Ontario boat tax and how we can help you understand boat purchase tax in Ontario. Our experts will help you get approved for financing today! 

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