Do I have to own the car for some time before I can bring it to Canada tax-free?

[GREAKLY]

I have been Canadian PR for the last few years. Recently I went to my home country, got married and plan to bring my new wife to Canada ASAP. It is my understanding that as a new immigrant (once she gets her PR documents) she is allowed to bring her possessions to Canada tax- and duty-free. That includes a car.

I have been thinking of using this occasion (her coming to Canada) for buying a new car in the US, where vehicles tend to cost at least a few thousand dollars cheaper than in Canada (not to mention GST and PST). So, I have a few questions:

1. Is there a minimum time ownership requirement (say, 3 or 6 months) before the newcomer could bring the car to Canada tax-free? I mean, can she fly from her home country to the US, buy a vehicle there and do the landing next day through the "land" border in a brand-new car?

2. Is there a requirement that the vehicle must have been registered (license plates and etc.) in the new immigrant's name in the country of her previous residence before it could be brought to Canada? In other words, could the vehicle be driven into Canada with temporary (US dealer) license plates or those would have to be permanent ones, possibly from her home country?

3. US dealer's plates tend to expire in a few weeks. From what I remember (I brought my car to Canada from the US a few years ago when I landed myself) the "importation" process (getting recall letter, exchanging the paperwork with the RIV, doing modifications and etc.) might take a bit longer. How can I/we drive the car around during that period? I mean, what shall I do during the time when dealer's plates expire and permanent plates are not yet available? Is there any way to get temporary plates from Canadian customs or at the local DMV office? Is there any way to get some sort of insurance while driving on temporary plates?

4. Once the car gets registered in my wife's name in Canada is there some time limit during which she can't sell it (because it was brought to the country tax-free)? Not that we plan to do that, but we plan to transfer the formal ownership of the car from her name to mine for insurance purposes.

Thank you in advance for your help.

 

[Leon]

According to http://cbsa-asfc.gc.ca/publications/pub/bsf5113-eng.html she must have owned and used the car for at least 6 months before importing it and she can not sell or even give it away for a full year after having imported it.

There is also a stipulation that no one item she brings with her can be worth more than $10,000 so if the car is worth more than that, she will have to pay tax and duty of the excess.

 

[GREAKLY]

There is also a stipulation that no one item she brings with her can be worth more than $10,000 so if the car is worth more than that, she will have to pay tax and duty of the excess.

Are you sure this stipulation applies to newcomers? I thought it only concerns former residents:

Items you can import duty- and tax-free

Settlers and Former Residents can include the following personal and household effects in their duty- and tax-free entitlement:

clothing and linen;
furniture;
furnishings;
appliances;
silverware;
jewellery;
antiques;
family heirlooms;
private collections of coins, stamps and art;
personal computers;
books;
musical instruments;
hobby tools and other hobby items;
personal vehicles;
pleasure boats and the trailers to carry them (trailers are subject to Transport Canada requirements);
mobile trailers, not exceeding 2.6 metres (9 feet) in width, that the owner is capable of moving on his or her own;
utility trailers;
motor homes;
private aircraft; and
tool sheds or garages that do not attach to or form part of a dwelling.

A house, a large trailer you use as a residence and any goods you use or will use commercially are not eligible as personal or household effects. These goods are subject to regular duty and taxes.


Value limitation (CAN$10,000)

If you are a former resident of Canada, any single personal or household item (including an automobile) that is worth more than CAN$10,000 on the date you import it is subject to applicable duty and taxes on the amount that is over CAN$10,000. This applies to items acquired after March 31, 1977.

The way I read it $10000 cap applies only to former residents and not to settlers. Am I wrong?

 

[Leon]

Yeah, maybe you are right.

 

[GREAKLY]

Also are you sure that six months requirement applies to Settlers:

Ownership, possession and use requirements

To import goods duty- and tax-free, Settlers must have owned, possessed and used the goods prior to their arrival in Canada and Former Residents must have owned, possessed and used the goods for at least six months before returning to resume residence.

While English is not my mother tongue, the way I read this law is that six months rule applies only to Former residents while Settlers simply "must have owned, possessed and used the goods prior to their arrival in Canada".

 

[Leon]

Maybe you are right again but you really should inquire about this as CBSA before you do it. Since your wife will not be buying the car in her home country, rather stopping by in the US to buy in and then immediately import it to Canada, they might have a problem with that. Even though you say, she has owned, possessed and used the car for a day or two, they might feel that you are abusing the rules.

 

[PMM]

Hi

Maybe you are right again but you really should inquire about this as CBSA before you do it. Since your wife will not be buying the car in her home country, rather stopping by in the US to buy in and then immediately import it to Canada, they might have a problem with that. Even though you say, she has owned, possessed and used the car for a day or two, they might feel that you are abusing the rules.

Here is what CBSA says about Settler's effects:http://www.cbsa-asfc.gc.ca/publications/dm-md/d2/d2-2-1-eng.pdf

15. In some cases, settlers wish to acquire goods in other than their homeland (e.g., while they are en route to Canada), and problems arise at the time of importation when not all of the ownership, possession, and use requirements have been met. As vehicles are frequently involved, the following criteria have been developed to assist settlers in such cases:
(a) the vehicle must have been owned and possessed by the settler, in accordance with the conditions described above, prior to his or her arrival in Canada;
(b) in addition to having owned and taken possession of the vehicle abroad, the settler must have been legally entitled to operate it in the free environment abroad (e.g., have a valid driver’s licence) and have actually driven it on the open roads abroad for some distance, prior to the date on which the settler arrives in Canada. (note that a test drive using dealer licence plates or a drive only on the manufacturer’s or dealer’s premises does not qualify);
(c) the vehicle must have been licensed and insured (temporarily or otherwise), in the name of the settler, for use in the free environment abroad during the period it was used;
(d) documentary evidence

 

[GREAKLY]

Thank you so much PMM for this information. It pretty much clears most of my questions. Basically, it looks like my wife could fly to States, go to a dealer, buy a car, get those 30-days "paper" license plates + some sort of temporary insurance and drive straight to Canada. Even if she buys the car in Buffalo and drives only a few miles to the border it should, technically, still satisfy the "use" requirement ("the settler must have driven the vehicle on the open roads abroad for some distance, prior to the date on which the settler arrives in Canada"). However, the second part of the sentence suggests that we should stay overnight at Niagra Falls or just drive to Canada after midnight of the vehicle purchasing day to satisfy the "timing" requirement ("the settler must have driven the vehicle ... prior to the date on which s/he arrives in Canada").

Just one question left: what shall we do if those 30-day tags expire and we still do not have the permanent ones yet? I mean, we might spend a few weeks driving that car in the US before coming to Canada. So there would be only a few days left on those tags. What shall we do in Canada once they expire? Will local DMV office give us some other temporary tags so that we can drive the vehicle while dealing with the RIV and inspections to complete the importation process?

Also on another forum I red a strange story. Some guy argued that for a Canadian who bought the vehicle in the US it's illegal to drive it in Canada with US-dealer "temporary" tags. He claimed that the "proper" way would be to buy the vehicle, drive it to the border, leave it there, somehow (by walk ) get to the nearest Canadian DMV office, show them vehicle's title, obtain Canadian temporary tags, then somehow get back to the border and switch the tags before leaving Canadian customs. In other words, his logic was that the vehicle could be driven in Canada only on Canadian temporary tags and that US temp tags will become invalid as soon as that vehicle (owned and driven by a Canadian) crosses the border.

Does anybody know anything about this law or it is just some BS?

 

[ckumark]

Does the vehicle that we want to import to Canada be mortgage free?

 

[GREAKLY]

Yes

 

[links18]

In many U.S. States, you don't necessarily have to be a resident to register a car there and thus get permanent plates. Getting U.S. insurance (which is often a condition of registration) might be more difficult w/o a valid North American drivers' license.

There shouldn't be any reason why you couldn't drive a vehicle with U.S. temporary plates into Canada, but it would be a dead giveaway that you haven't owned the car very long.

 

[GREAKLY]

In many U.S. States, you don't necessarily have to be a resident to register a car there and thus get permanent plates. Getting U.S. insurance (which is often a condition of registration) might be more difficult w/o a valid North American drivers' license.

Can you name a few of those states where you don't have to be a resident to register the car? I spoke with a number of DMVs and it seems that in order to register the car and get permanent plates one needs to be a resident of that state (at least temporarily). Which means, getting local driver's license of that state (usually in exchange for Canadian one). It's doable but is a lot of hassle (one needs to have some sort of "permanent" address in that state, surrender his/her Canadian driver's license and etc.).

There shouldn't be any reason why you couldn't drive a vehicle with U.S. temporary plates into Canada, but it would be a dead giveaway that you haven't owned the car very long.

Is there a requirement that specifies for long long I have to own the car before I can bring it to Canada tax-free? The way I read the law, it only says that I must have owned, possessed and used the car prior to bringing it to Canada. It doesn't specify, for how long I must have done all that. Or does it?

 

[Sarnia]

You should call the following agencies. They are your most reliable sources of info.

Canada Customs and Revenue Agency: 1-800-461-9999

Registrar of Imported Vehicles: 1-888-848-8240

 

[ckumark]

so what happened finally. Did you buy a car in US and drove to canada hassel free?

 

[cute]

Thank you so much PMM for this information. It pretty much clears most of my questions. Basically, it looks like my wife could fly to States, go to a dealer, buy a car, get those 30-days "paper" license plates + some sort of temporary insurance and drive straight to Canada. Even if she buys the car in Buffalo and drives only a few miles to the border it should, technically, still satisfy the "use" requirement ("the settler must have driven the vehicle on the open roads abroad for some distance, prior to the date on which the settler arrives in Canada"). However, the second part of the sentence suggests that we should stay overnight at Niagra Falls or just drive to Canada after midnight of the vehicle purchasing day to satisfy the "timing" requirement ("the settler must have driven the vehicle ... prior to the date on which s/he arrives in Canada").

Just one question left: what shall we do if those 30-day tags expire and we still do not have the permanent ones yet? I mean, we might spend a few weeks driving that car in the US before coming to Canada. So there would be only a few days left on those tags. What shall we do in Canada once they expire? Will local DMV office give us some other temporary tags so that we can drive the vehicle while dealing with the RIV and inspections to complete the importation process?

Also on another forum I red a strange story. Some guy argued that for a Canadian who bought the vehicle in the US it's illegal to drive it in Canada with US-dealer "temporary" tags. He claimed that the "proper" way would be to buy the vehicle, drive it to the border, leave it there, somehow (by walk ) get to the nearest Canadian DMV office, show them vehicle's title, obtain Canadian temporary tags, then somehow get back to the border and switch the tags before leaving Canadian customs. In other words, his logic was that the vehicle could be driven in Canada only on Canadian temporary tags and that US temp tags will become invalid as soon as that vehicle (owned and driven by a Canadian) crosses the border.

Does anybody know anything about this law or it is just some BS?

did you import from states? any suggestions????????