Giving a car to a family member can be a generous act, simplifying transportation for loved ones or providing a first vehicle for a young driver. In Maryland, the process of gifting a vehicle within the family is streamlined, and importantly, it often comes with a significant benefit: exemption from excise tax. This guide will walk you through the essentials of Gifting A Car To A Family Member in Maryland, ensuring a smooth and legally sound transfer.
Understanding the Gift Exemption in Maryland
Maryland law recognizes vehicle transfers between close family members as gifts, potentially exempting them from the standard 6% vehicle excise tax. This exemption applies when the vehicle is genuinely given as a bona fide gift, meaning no exchange of money, goods, or services occurs in return. The Maryland Motor Vehicle Administration (MVA) specifies eligible family relationships which are detailed in the Application for Maryland Gift Certification. This form is crucial for establishing the gift status and claiming the tax exemption.
This gift exemption can even extend to vehicles originally titled outside of Maryland, provided certain conditions are met. The out-of-state vehicle must have been previously titled in Maryland by the family member who is now gifting it, and the family relationship must still qualify under the MVA’s gift regulations. It’s important to note that if all parties involved in the transfer (both givers and receivers if there are co-owners) do not meet the defined family relationship criteria, the vehicle will not be considered a gift, and excise tax will apply. A notable exception exists for spouses co-owning a vehicle: gifting to a parent is still considered a child-to-parent transfer, even if one spouse isn’t directly related to the recipient parent.
Step-by-Step Guide to Title Transfer for a Gifted Vehicle
To officially transfer the title of a gifted vehicle, several steps and documents are required. You can complete this process in person at any full-service MVA branch office, by mailing the documents to the MVA’s Mail in Title Unit, or by using an MVA-licensed tag and title service for assistance.
Typically, you will need to gather the following documents:
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Existing Title: For Maryland titled vehicles, ensure the “Assignment of Ownership” and “Application for Title and Registration” sections on the back of the title are completed and signed. The giver signs as the “seller,” and the receiver as the “buyer.” For out-of-state titles, assignment must comply with that state’s regulations.
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Application for Maryland Gift Certification (Form VR-103): This form is essential for declaring the transfer as a gift and confirming the family relationship.
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Proof of Relationship: If the last names of the giver and receiver differ, you must provide proof of your relationship, such as a birth certificate, marriage certificate, civil union certificate, divorce decree, or adoption certificate.
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Gift Title Transfer – Certified Statement (Form VR-299): This form is required only when an aunt or uncle (aged 65 or older) gifts a vehicle to a niece or nephew. If the aunt or uncle is under 65, the transfer is not considered a gift for tax purposes.
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Lien Release (if applicable): If a lien is recorded on the existing title, you’ll need proof of lien release. This can be a Maryland Security Interest Filing (SIF) or a signed letter from the lienholder identifying the vehicle and confirming the lien release.
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Maryland Safety Inspection Certificate (if applicable): This certificate is usually needed if you intend to register the vehicle. However, an inspection may not be required if you received the vehicle as a gift from an immediate family member (parent/stepparent, child/stepchild, or spouse) and the vehicle meets current registration safety inspection requirements.
After submitting your application, your new title will be mailed to you. If you also register the vehicle at the same time, you can receive your registration card, license plates, and expiration stickers immediately if applying in person. Otherwise, these items will also be mailed to you.
Fees and Contact Information
While the article does not specify fees, be prepared for standard title transfer fees. For detailed information on fees or if you have questions, you can contact the MVA:
MVA Mail in Title Unit
6601 Ritchie Highway, NE
Glen Burnie, MD 21062
MVA Customer Service Center: 1-410-768-7000
TTY/Hearing Impaired: 1-301-729-4563
Gifting a car to a family member in Maryland is a straightforward process when you understand the requirements and gather the necessary documentation. By utilizing the gift exemption and following these steps, you can ensure a smooth and tax-efficient vehicle transfer. Always refer to the official Maryland MVA website or contact them directly for the most up-to-date information and any specific questions related to your situation.
