Someone gifted me a boat and provided me with the original receipt that shows what they paid for it. I can see they paid $47000 + HST (=$53110).

If I sold the boat to a friend for $50000, do I need to charge my friend an additional 13% HST? Meaning they pay me $56500? Or does my friend just pay me $50000, and then my friend separately pays the government $6500?

And did I just experience a capital gain of $3k (=$50000-$47000)? Which means I need to pay capital gains tax?

1 Answer 1


[note: I am using raw links in this answer because on matters of tax, it's important to know you are on a government site and not a random publication.]

You do not have to charge HST on the sale of the boat because it is "capital property" https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/when-register-charge.html see Footnote 1 and https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/definitions-gst-hst.html#capital

If you do not have to collect HST on a sale, then specifically for cars and boats, the seller must send it along themselves. https://www.ontario.ca/document/retail-sales-tax

You do have capital gain when you sell a thing you were using personally. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/completing-schedule-3/personal-use-property.html (That page says you don't generally have a gain, but only because such things tend to go down in value over time.) It is based on what you paid for it, except that when you are given it, you are deemed to have paid what it was worth when you acquired it. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/shares-funds-other-units/identical-properties/property-you-inherit-receive-a-gift.html

So yes, your purchaser should send along 13% of the purchase price, as explained at the Ontario link. And you have a capital gain of the difference between its value when you received it (plus any non-maintenance upgrades), and your selling price.

  • 1
    So the $47000 receipt is irrelevant, they need to come up with some value for the time they actually got the boat? May 28, 2023 at 17:13
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    If the giver bought it and immediately gave it, the receipt is useful. But if not then, yes, they'll need to figure out the fair market value at the time of receipt. May 28, 2023 at 17:16
  • You have to register for HST and collect HST on the sale that puts you over the $30k small supplier limit. From the first link in your answer: "You have to start charging GST/HST on the supply that made you exceed $30,000". (although there might be some special rule for boats not mentioned in the pages you linked to)
    – iter
    May 30, 2023 at 20:57
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    @smitop I read again and since this is a capital property, you don't have to register and collect at all. I've edited. (I have no idea how this applies to someone in the actual boat selling business but that's not the OP so I am not considering it.) May 30, 2023 at 21:08

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