Gifting a car to a relative can be a great way to help a member of your family and get rid of a car you don’t want. The Maryland Motor Vehicle Administration (MMVA) has a process for gifting a car to ensure the gift is legally compliant. Not all drivers are familiar with this process, so we’d like to tell you about some things you need to know when gifting a car in Rockville, MD.
No Excise Tax
When you transfer a car in Maryland, there is a 6% excise tax on the value of the car. If you’re giving a car to a family member, however, the 6% excise tax doesn’t apply. The MMVA defines a family member as:
- Parents, including stepparents
- Children, including natural and stepchildren
- Spouses
- Grandparents
- Grandchildren
- Siblings, including half-siblings
- In-laws
- Aunts and uncles who are 65 or older
License Plates
When you gift a car, even to a family member, you will usually always have to return the original license plates to the MMVA. Your family member who will receive the car will need to apply for a new set of license plates. There are four exceptions when the original license plates can be retained:
- The car was owned by one spouse, and both spouses will now own the car in joint ownership
- The car was jointly owned by both spouses and will now be owned by only one spouse
- The car was owned by a parent and a child, and the car will now be owned only by the parent or the child
- The car was owned by a parent or a child, and the parent and child will now jointly own the car
You Must Specify It’s a Gift
The procedure for gifting a car is very similar to buying and selling a car. You and your family member will need to complete most of the same documents. Gifting a car has two specific changes that you need to be aware of. Firstly, the purchase price of the car has to be marked as “Gift” on the Bill of Sale (Form VR-181).
You and the family member you’re gifting the car to must both complete Form VR-103, Application for Maryland Gift Certification. This document will be added to the other documents that go to the MMVA to transfer the title to the car. Click here for more information on transferring vehicle ownership.
Now that you have a plan for what to do with your current vehicle, you may now begin shopping for your new Toyota! DARCARS 355 Toyota of Rockville is your trusted dealership. Browse our cars for sale online or stop by and see us in person!
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