GST/HST on Used Goods
When used goods carry GST/HST, how trade-ins reduce the tax, consignment, and used vehicle sales.
The short version
- Used goods sold by a GST/HST registrant in the course of business are taxable, just like new ones: a used car from a dealer, used equipment from a business, refurbished electronics from a store.
- Used goods sold by an individual who isn't registered (a garage sale, a private sale of personal items) carry no GST/HST.
- When a registrant accepts a trade-in from a non-registered customer, GST/HST is charged only on the net price after the trade-in allowance.
- A registrant buying used goods from a private seller pays no GST/HST, so there's no input tax credit to claim.
- Some provinces charge their own tax on private sales of used vehicles; in Ontario, retail sales tax is paid when the vehicle is registered.
GST/HST on Used Goods
The word "used" doesn't change the tax. What matters is who's selling. A registered business selling a used forklift charges GST/HST on it; you selling your old lawnmower to a neighbour doesn't. Between those two sit trade-ins, consignment, online resellers and vehicle sales, each with its own twist. Here's how they work.
Who Charges Tax on Used Goods
| Seller | GST/HST? |
|---|---|
| Registered business selling used goods (dealer, store, reseller) | Yes, at the rate where the goods are delivered |
| Registered business selling its own used equipment or vehicles | Yes, generally, on the sale price |
| Individual selling personal items (not in business) | No |
| Small supplier business, not registered | No |
| Online reseller (thrift flipping, vintage, sneakers) once registered | Yes; see online seller taxes |
Whether you need to register as a reseller is on do I need a GST/HST number? Selling used goods regularly for profit is also business income for income tax.
Selling used goods or taking trade-ins?
Describe what you sell and who you buy from. The SmartFile tells you when to charge GST/HST, how trade-ins and consignment work, and what ITCs you can claim.
Trade-Ins
| Trade-in from | How the tax works |
|---|---|
| A non-registered customer (most consumers) | Tax only on the net amount. Example: a $25,000 vehicle with a $10,000 trade-in allowance in Ontario: HST is 13% of $15,000, which is $1,950 |
| A registered customer trading in a business asset | The customer charges you GST/HST on the trade-in, and you charge tax on the full price; each side claims ITCs |
The net-amount rule is a real saving for consumers, which is why dealers and equipment sellers encourage trade-ins.
Buying Used Goods as a Registrant
- From a registered seller: you pay GST/HST and claim it as an input tax credit; see what can you claim as an ITC?
- From a private seller: no GST/HST paid, so no ITC. The full price is your cost.
- Imported used goods: GST/HST is charged at the border, and it's claimable as an ITC with the customs documents.
Consignment Sales
When a registered consignment store sells goods for a private consignor, the store generally acts as an agent: GST/HST is charged on the sale price if the store, as auctioneer or agent, is required to collect it. Consignment and auction rules are technical; if you run one, confirm how your arrangement is treated.
Used Vehicles
| Sale | Tax |
|---|---|
| From a registered dealer | GST/HST on the price, minus any non-registrant trade-in |
| Private sale in Ontario | No GST/HST; the buyer pays 13% retail sales tax at ServiceOntario on the greater of the price paid and the vehicle's wholesale value, with exemptions for some family transfers |
| Private sale in other provinces | Varies: some charge provincial sales tax or a vehicle registration tax; check the province |
| Business vehicle sold by a registered business | GST/HST on the sale, generally; see GST/HST on vehicle purchases |
Rates by province are on GST/HST rates by province, and charging rules on how to charge GST/HST. Back to the GST/HST guide.
Used Goods GST/HST Questions
Is there GST/HST on used goods?
Yes, when a registered business sells them in the course of its business. Sales by individuals of personal items, and by unregistered small suppliers, have no GST/HST.
Do I pay HST when I buy a used car privately?
Not GST/HST. In Ontario, the buyer pays 13% retail sales tax when registering the vehicle, based on the greater of the price paid and its wholesale value, unless an exemption applies. Other provinces have their own rules.
How does GST/HST work on a trade-in?
When a registrant accepts a trade-in from a non-registered customer, GST/HST is charged only on the net amount after the trade-in allowance.
Can I claim an ITC on used goods I bought from a private seller?
No. No GST/HST was paid, so there is nothing to claim.
Do I charge GST/HST when I sell my business equipment?
Generally yes, if you are registered and the equipment was used in your commercial activities.
Sources: CRA, GST/HST in special cases (trade-ins); RC4022. Checked October 2026. Ontario's retail sales tax on private vehicle sales is administered by the province; we summarized it and are not sure of every exemption. Consignment and auction rules are summarized.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.