The absolute minimum tax receipt you can receive in Canada for donating your car is $500.
Even if the charity sells your car for less or its fair market value is lower, you will still receive a tax receipt for $500.
This makes it beneficial if you have a car that is no longer worth $500.
Considering that it might be difficult to sell that vehicle anyway, donating it and receiving more than its value is a win-win situation.
If the value of your vehicle is more than $500, the charity will likely require you to get your vehicle appraised.
This will help determine the actual fair market value for the vehicle that you are donating.
Can You Always Get a Tax Receipt for Donating a Car in Canada?
Yes, anytime you donate your car to a charity in Canada you will receive a tax receipt for your donation.
Although the first instinct from many Canadians is to sell your used car for cash, if it’s only worth a few hundred dollars, donating it to a charity allows you to lower your taxable income.
This can potentially reduce the amount of income tax you are required to pay for that year.
A tax receipt for donating a car in Canada works just like donating cash.
The only difference is that the amount of your tax receipt is determined by the fair market value of the car and not the amount of cash you donate.
How is the Value of the Tax Receipt Calculated?
Most newer vehicles will need to be appraised by an official appraiser so that the charity is aware of the fair market value of the car.
If it is an older car or not likely to get a fair market value of at least $500, the tax receipt will be for $500.
The value of your tax receipt can also vary from Province to Province and even from city to city.
It could depend on certain taxes or even the supply of that vehicle.
Most charities will auction donated vehicles off, so the demand for that vehicle in your region could also impact how much you receive.
Eligibility Criteria for Receiving a Tax Receipt for Donating a Car in Canada
Some eligibility criteria must be met to receive a tax receipt for the vehicle you donate in Canada.
Some of the rules can vary depending on the charity you donate your car to.
Here are some of the eligibility criteria to consider before donating your car in Canada:
- The vehicle must start, run, and be drivable
- The vehicle should have Provincially-issued license plates and registration
- The vehicle should not have any outstanding loans or liens against it
- The vehicle should have ownership documents so you can prove that it belongs to you or your family
- The vehicle should not be unsafe to drive or have any major damage to it
- The vehicle should be registered to you or a family member.
Note that even if all of these criteria are met, it is ultimately up to the charity to issue a tax receipt for your vehicle.
Please contact your charity of choice if you are unsure about any of these criteria before starting the process of donating your vehicle.
