Understanding Bills of Sale in Canada

When Do You Need a Bill of Sale?

A bill of sale is a legal document that records the transfer of ownership of an item from a seller to a buyer. You should use a bill of sale whenever you are buying or selling:

• Vehicles: Cars, trucks, motorcycles, boats, RVs, ATVs, and snowmobiles
• High-value personal property: Electronics, furniture, equipment, jewelry, and collectibles
• Livestock or farm equipment
• Any item where proof of ownership transfer is important

Legal Requirements by Province

Vehicle registration and bill of sale requirements vary across Canadian provinces and territories:

• Ontario: A Used Vehicle Information Package (UVIP) is required for private vehicle sales. A bill of sale is needed for registration at ServiceOntario. A valid Safety Standards Certificate is required.
• British Columbia: The buyer and seller must complete a Transfer/Tax Form at an Autoplan broker. A bill of sale serves as proof of the sale price for Provincial Sales Tax (PST) purposes.
• Alberta: A bill of sale is required to register a vehicle at a registry office. An Out-of-Province Inspection may be needed for vehicles from other provinces.
• Quebec: Both parties should complete the back of the vehicle registration certificate. A bill of sale helps establish the sale price for QST purposes.
• Manitoba: A bill of sale is needed to register the vehicle at Manitoba Public Insurance (MPI). A safety inspection is required for all used vehicles.
• Saskatchewan: A bill of sale is required when registering through SGI (Saskatchewan Government Insurance).
• Atlantic Provinces (NB, NS, PEI, NL): A bill of sale or proof of purchase is generally required at the motor vehicle registry. Safety inspections may be required.

Vehicle-Specific Requirements

• Safety Certificate: Many provinces require a valid safety inspection or safety standards certificate before transferring ownership of a used vehicle.
• Emissions Test: Some jurisdictions, such as parts of Ontario and British Columbia, require emissions testing (e.g., Ontario's Drive Clean program, though it was discontinued in 2019, BC still has AirCare in some regions).
• Lien Check: Buyers should perform a lien search through their provincial registry to ensure the vehicle has no outstanding debts.
• VIN Verification: Always verify that the VIN on the vehicle matches the VIN on the registration and bill of sale.
• Odometer Disclosure: Record the odometer reading accurately to protect both parties from fraud claims.

Tips for Private Vehicle Sales

• Meet in a safe, public location for the transaction
• Verify the seller's identity with government-issued ID
• Check the vehicle's history through services like CARFAX or CARPROOF
• Have the vehicle inspected by a certified mechanic before purchase
• Ensure the title is clear of any liens or encumbrances
• Never pay with cash alone; use a traceable method like a bank draft or e-transfer
• Keep copies of the bill of sale, payment receipt, and all related documents

Protecting Yourself as a Buyer

• Insist on a written bill of sale with all details filled out completely
• Verify the VIN against the registration and the physical vehicle
• Perform a lien search before paying
• Request maintenance records if available
• Test drive the vehicle and have it inspected before committing
• Understand that "as-is" means you accept the item with no guarantees

Protecting Yourself as a Seller

• Keep a signed copy of the bill of sale for your records
• Clearly state the vehicle or item is sold "as-is" if no warranty is offered
• Remove your insurance and plates from the vehicle immediately after the sale
• Notify your provincial motor vehicle registry of the sale
• Accept payment only via secure methods (bank draft, certified cheque, e-transfer)
• Include a witness signature for added legal protection

Record Keeping Requirements

Both the buyer and seller should retain a copy of the bill of sale for their personal records. For tax purposes, keeping a bill of sale for at least 6 years is recommended by the Canada Revenue Agency. If the item is for business use, the bill of sale may be needed to support capital cost allowance (depreciation) claims or input tax credits.