Handing a car to a spouse, child or parent is common, and North Carolina has a tax exemption for some of these transfers. Here is which ones qualify, which form you need, and the steps to get the title changed.
The highway use tax
When a car is titled in North Carolina, the new owner normally pays a highway use tax (NCDMV has the current rate on its taxes page). Some transfers are exempt. For family transfers, the exemption is claimed on the MVR-613 Highway Use Tax Exemption Certification, which cites G.S. 105-187.6.
Which family transfers are exempt
The form lists these reasons, among others:
| Exempt reason on form MVR-613 | Notes |
|---|---|
| Gift between spouse and spouse | A gift, so no payment for the car. |
| Gift between parent and child | Either direction is a parent and child. |
| Gift between stepparent and stepchild | |
| Will or intestacy, when no compensation has been paid to the estate | See selling a deceased owner's car. |
| Disposition of marital property due to separation or divorce | |
| To a co-owner when there is no compensation for the transfer |
Not on the list: gifts between siblings, grandparents and grandchildren, aunts, uncles, cousins or friends. If the buyer is one of those, ask NCDMV before you assume an exemption applies.
It has to be a gift
The exemptions for family are written as gifts. If money changes hands, it is a sale, so ask NCDMV whether the exemption still applies before you rely on it. Write what actually happened on your paperwork.
The steps
- The giver signs the title in front of a notary. North Carolina requires the seller's assignment to be signed in the presence of a person authorized to administer oaths (G.S. 20-72).
- The new owner completes the Title Application, MVR-1, and the disclosure forms that apply, such as the odometer statement.
- The new owner signs the MVR-613 and checks the right reason. The form has a notary block.
- Get a note of what happened. A short bill of sale marked as a gift, with the date, protects both of you.
- Plates: the giver removes their plate. The new owner registers the car under their own plate and insurance.
Is there a loan on the car?
Then the lender holds the title, and it has to be paid or the lien released before the title can move. See the guide to selling a car with a lien.
Prefer to sell the car and share the money?
If nobody in the family wants the car, we buy cars across Eastern NC and pay at pickup. Get a free offer, no obligation.
Frequently asked questions
Sources
- NCDMV form MVR-613, Highway Use Tax Exemption Certification
- G.S. 105-187.6
- NCDMV: Taxes
- G.S. 20-72, Transfer of title