What taxes are applicable if I buy a plane?

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ogopogo
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What taxes are applicable if I buy a plane?

Post by ogopogo »

Looked at my first plane recently - what should I be expecting to pay Her Majesty - or should that be "Majesties" if I include Ms Wynne?
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JasonE
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Re: What taxes are applicable if I buy a plane?

Post by JasonE »

In Ontario you pay RST (13%).....
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CpnCrunch
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Re: What taxes are applicable if I buy a plane?

Post by CpnCrunch »

You pay 12% "PST" in BC (it's really PST+GST, but they call it PST just to make it sound a little less unreasonable).
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ogopogo
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Re: What taxes are applicable if I buy a plane?

Post by ogopogo »

What isRST and where does it come in?
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photofly
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Re: What taxes are applicable if I buy a plane?

Post by photofly »

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ogopogo
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Re: What taxes are applicable if I buy a plane?

Post by ogopogo »

So today I was told that if I buy the plane from an individual (as opposed to a broker), no taxes are due. I live in Ontario.

True?
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Re: What taxes are applicable if I buy a plane?

Post by photofly »

False, unfortunately. Read the page I linked to above.

If you buy from an HST registered dealer, you pay HST. If you buy from a non registered individual, you pay RST. Same as for cars and boats. HST and RST both at 13%.
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sstocker31
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Re: What taxes are applicable if I buy a plane?

Post by sstocker31 »

Nothing if you negotiate it into the price.
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RatherBeFlying
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Re: What taxes are applicable if I buy a plane?

Post by RatherBeFlying »

It sounds like you are in Ontario; so would be assessed for HST.

In Alberta, there's only GST which is applied only when buying from a GST registrant or from the US.

Moving to Alberta for a couple months or setting up an Alberta corporation to hold the aircraft gets you out of HST, RST...

Setting up an Alberta corporation costs a few hundred bucks, plus a bit over a hundred a year for annual report.

Once registered to a corporation, you can sell the corporation without triggering HST, RST...

I know a fine lady who handles the Alberta paperwork for several aircraft. PM if interested.
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crazyaviator
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Re: What taxes are applicable if I buy a plane?

Post by crazyaviator »

In the "good old days" it used to be just 1 of the 2 taxes due for private sales ( provincial tax) about 5-7% depending on the province,,, NOW, on a 20-50 year old plane that has been taxed at new, every time its sold, taxes on the service, parts, fuel oil etc makes me think we are living as slaves in a prison. WHY doesn't the people say enough is enough??
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Johnny#5
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Re: What taxes are applicable if I buy a plane?

Post by Johnny#5 »

Well with Liberals in Ontario and federally these tax laws will either not change or increase..
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RatherBeFlying
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Re: What taxes are applicable if I buy a plane?

Post by RatherBeFlying »

For the sake of historic accuracy, the Ontario PST was brought in by Leslie Frost and the GST by Mulroney, both Conservatives.
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Chris M
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Re: What taxes are applicable if I buy a plane?

Post by Chris M »

crazyaviator wrote:In the "good old days" it used to be just 1 of the 2 taxes due for private sales ( provincial tax) about 5-7% depending on the province,,, NOW, on a 20-50 year old plane that has been taxed at new, every time its sold, taxes on the service, parts, fuel oil etc makes me think we are living as slaves in a prison. WHY doesn't the people say enough is enough??
I've always thought this is the biggest scam going. One of my cars has had something like 6 owners and started at $50K. I bought it eventually for $5,000. So if every owner has paid tax on it when they registered how much has Ontario collected off my single car? $15K? 20? I'm waiting for the day that some asinine politician tries to figure out how to tax someone for buying an old couch on Kijiji.
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cap41
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Re: What taxes are applicable if I buy a plane?

Post by cap41 »

I've bought 2 planes in Ontario privately. Did not have to pay tax. They were cheaper 25K. I was advised by TC that the bill of sale should show 1$. This is after submitting the proper receipts. I was never trying to deceive.
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woodzi
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Re: What taxes are applicable if I buy a plane?

Post by woodzi »

RatherBeFlying wrote:For the sake of historic accuracy, the Ontario PST was brought in by Leslie Frost and the GST by Mulroney, both Conservatives.
To be fair, the GST replaced a hidden 11% manufacturers tax that had the PST applied on on top. The hidden tax was not as broad in scope though.
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Taxivasion
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Re: What taxes are applicable if I buy a plane?

Post by Taxivasion »

Bought two airplanes in Ontario privately, Never paid taxes. This was before HST when only PST was applicable. I was advised you'll get a letter saying you owe PST, Ignore. If you get a second letter then pay up. Never got a second letter. this was 7-8 years ago.

I don't know anyone on our field that's paid taxes on a private aircraft purchase.
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Re: What taxes are applicable if I buy a plane?

Post by photofly »

cap41 wrote:I've bought 2 planes in Ontario privately. Did not have to pay tax. They were cheaper 25K. I was advised by TC that the bill of sale should show 1$. This is after submitting the proper receipts. I was never trying to deceive.
Did you get that advice from a government official in writing? I'm fairly sure that under-declaring the value of a sale with the intent to avoid tax due is an offence that carries a hefty prison sentence.
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fleet16b
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Re: What taxes are applicable if I buy a plane?

Post by fleet16b »

Bought an aircraft in Nashville last weekend and brought it across the border in Ontario.
Tax was 13 %
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photofly
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Re: What taxes are applicable if I buy a plane?

Post by photofly »

what did you buy :-) ?
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ogopogo
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Re: What taxes are applicable if I buy a plane?

Post by ogopogo »

I haven't bought anything yet - just contemplating. Here is what COPA has to say:

Here is a quick summary of tax issues when buying an aircraft:

Buying an aircraft from: PST GST HST (NS, NL and NB only)
a private individual Yes No Yes
a GST registered business Yes Yes Yes
a foreign country Yes Yes Yes
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Taxivasion
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Re: What taxes are applicable if I buy a plane?

Post by Taxivasion »

photofly wrote:
cap41 wrote:I've bought 2 planes in Ontario privately. Did not have to pay tax. They were cheaper 25K. I was advised by TC that the bill of sale should show 1$. This is after submitting the proper receipts. I was never trying to deceive.
Did you get that advice from a government official in writing? I'm fairly sure that under-declaring the value of a sale with the intent to avoid tax due is an offence that carries a hefty prison sentence.
You're right, We should turn ourselves in. The Liberals need our money.
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Re: What taxes are applicable if I buy a plane?

Post by photofly »

Are you an income tax cheat too?
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CpnCrunch
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Re: What taxes are applicable if I buy a plane?

Post by CpnCrunch »

Taxivasion wrote:
You're right, We should turn ourselves in. The Liberals need our money.
I think photofly's concern was more along the lines of you getting charged under the criminal code if they find out you deliberately undervalued the plane, rather than any concern about the government not taking enough of your money.

http://business.financialpost.com/perso ... ax-offence
http://www.kelowna.com/2009/09/03/kelow ... -tax-scam/
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fleet16b
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Re: What taxes are applicable if I buy a plane?

Post by fleet16b »

photofly wrote:what did you buy :-) ?
A 1928 designed Pietenpol Aircamper that was 90% completed
with an original Ford model A engine powering it

Previously I posted about flying one for a friend that has a very early one in his collection.
Well I fell in love with flying it and just had to have one
Doing a bit of digging I found one south of Nashville and bought it .
It was a project that was started by a retired NASA Engineer but unfortunately he passed away before he could finish it .
It will be very original to the 1928 era. I have already acquired the period original
Curtiss Jenny instruments and am now looking for Jenny spoke wheels
There will be absolutely nothing modern in this aircraft , not even an ELT
As I already own and fly another Antique airplane, There is no time frame for completion
I just have to find a place to do the work and am currently looking for a 1-2 car garage or corner odf a shop or heated hanger to rent in the Hamilton Ontario area
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cap41
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Re: What taxes are applicable if I buy a plane?

Post by cap41 »

photofly wrote:
cap41 wrote:I've bought 2 planes in Ontario privately. Did not have to pay tax. They were cheaper 25K. I was advised by TC that the bill of sale should show 1$. This is after submitting the proper receipts. I was never trying to deceive.
Did you get that advice from a government official in writing? I'm fairly sure that under-declaring the value of a sale with the intent to avoid tax due is an offence that carries a hefty prison sentence.


I didn't under value anything! i simply filled out the provided TC example that already stated the price (1$). I not the smartest, but if I were under valuing a car or an airplane, i doubt I would drop it down that low!
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