I’m a Canadian citizen and have been living in the United States for ten years. I want to move back to Canada. I have a used 2006 Porsche Cayenne bought in the USA – but it’s made in Germany. Kelley Blue Book says it’s worth about US$2,000 (C$2,600). Do I have to pay duty on this car when moving back? – Edward
“Welcome back to Canada. You owe us money.”
That’s something you don’t want to hear when you’re crossing the border, especially if you’re bringing back something pricey, such as a U.S.-bought car.
Normally, depending on where your car was built, you might have to pay duty and GST.
But if you’ve been away from Canada for at least a year, and you’ve owned your car for at least six months, you’ll get a break.
“The first $10,000 of vehicle value would be duty-free and exempt from the taxes,” said Maria Mate, client services supervisor with Pacific Customs Brokers in Vancouver. “Any amount over the $10,000 would be subject to the duty and tax.”
That means if your vehicle is subject to duty and it’s worth less than $10,000, you wouldn’t pay the 6.1 per cent duty or the 5 per cent GST.
But if it was worth $15,000, for example, you’d have to pay $555 – 11.1 per cent of $5,000 – in combined duty and federal tax.
The exception also applies to people who are moving to Canada for the first time and plan to stay here for a year.
Customs rules can be confusing, especially when it comes to cars.
When you’re bringing a car into Canada that you bought in the U.S, it matters where the car was built.
if your car was built outside of North America, you would normally have to pay a 6.1 per cent duty on the current value of your car when you cross the border.
But if your car was built in the U.S., Canada or Mexico – the three members of the Canada United States Mexico Agreement (CUSMA), which replaced the North American Free Trade Agreement (NAFTA) this year – you don’t have to pay duty.
“The waters get muddy because you’ll see Toyota vehicles made in the U.S. and Ford vehicles made in China,” Mate said.
How can you tell where your car was built? Check your vehicle identification number (VIN). If it starts with a number between 1 and 5, it was built in North America.
If your car is more than 25 years old, it’s considered a vintage vehicle and you wouldn’t have to pay duty, Mate said.
When you’re moving a car across the border into Canada, there are other fees you have to pay.
If your car is less than 15 years old, you’ll have to pay $325, plus tax, to the Registrar of Imported Vehicles (RIV).
If your car has air conditioning, you have to pay a $100 excise tax. Plus, you’ll also have to pay a Green Levy of at least $1,000 if your car has a fuel consumption rating of more than 13 litres/100 km and was put into service after March 18, 2007.
Once you get it across the border, you’ll have to get your car inspected to see if it meets safety standards.
The federal inspection, which you can do at a Canadian Tire, is $25. Depending on the province, you may also have to get a provincial inspection. In British Columbia, for instance, that costs $120.
If it’s not up to Canadian safety standards – for instance, if it doesn’t have daytime running lights – you’ll have to pay for any fixes needed.
“Then there’s the provincial sales tax which gets paid when you register your vehicle,” Mate said.
Some provinces, including B.C., don’t require new residents to pay provincial tax on personal vehicles that they’re bringing with them.
Have a driving question? Send it to firstname.lastname@example.org. Canada’s a big place, so let us know where you are so we can find the answer for your city and province.
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