Can You Gift a Car in Maryland? Here’s What You Need to Know

AvatarByNicole Eder Gift Restrictions & Considerations

Gifting a car can be a meaningful and generous way to transfer ownership, whether to a family member, friend, or loved one. In Maryland, the process of gifting a vehicle involves specific rules and considerations that differ from a traditional sale. Understanding these nuances can help ensure a smooth and legally compliant transfer, avoiding potential pitfalls along the way.

When you decide to gift a car in Maryland, it’s important to recognize that the transaction is treated differently from a typical purchase. This distinction affects everything from the paperwork required to tax implications and title transfers. While gifting might seem straightforward, the state’s regulations and procedures demand careful attention to detail to confirm that the gift is properly documented and recognized by the Maryland Motor Vehicle Administration (MVA).

Whether you’re planning to gift a car to a family member or a close friend, knowing the basics about the process in Maryland can save time, money, and hassle. From understanding the necessary forms to grasping the tax exemptions that may apply, being informed upfront is key to making the gifting experience positive and stress-free. The following content will guide you through the essential aspects of gifting a car in Maryland, providing clarity and confidence as you navigate this unique transaction.

Legal Requirements for Gifting a Car in Maryland

When gifting a car in Maryland, it is essential to comply with specific legal requirements to ensure a smooth and lawful transfer of ownership. The process involves documentation, title transfer, and adhering to state regulations that govern vehicle gifts.

The primary legal document involved in gifting a car is the Certificate of Title. The current owner (donor) must properly endorse the title to transfer ownership to the recipient (donee). The title must be signed in the designated section that indicates a gift, which helps clarify the transaction type to the Maryland Motor Vehicle Administration (MVA).

Additional requirements include:

  • Odometer Disclosure: For vehicles less than 10 years old, the donor must complete an odometer disclosure statement. This is mandatory and must be included on the title or a separate form.
  • Gift Affidavit: Maryland requires the completion of a Gift Affidavit (Form VR-103) to verify that the vehicle is being transferred as a gift and not sold. This form helps the MVA waive certain fees and taxes.
  • Tax Exemption: When gifting a vehicle to a family member, the recipient may be exempt from paying the vehicle excise tax, provided proper documentation is submitted.

Steps to Complete the Gift Transfer

To legally gift a car in Maryland, follow these steps:

  • Step 1: Prepare the Title for Transfer

The donor must sign the Certificate of Title on the “Assignment of Ownership” section, indicating the transfer is a gift. If the title is lost, a duplicate title must be obtained before proceeding.

  • Step 2: Complete the Gift Affidavit

Both the donor and donee should complete the Gift Affidavit (Form VR-103). This document confirms the transaction is a gift and helps in processing tax exemptions.

  • Step 3: Submit Odometer Disclosure

Include odometer information on the title or a separate disclosure form to comply with federal and state regulations.

  • Step 4: Visit the MVA or Use Online Services

The donee must submit the signed title, Gift Affidavit, and any required forms to the Maryland MVA. This can be done in person at an MVA office or, in some cases, through online services if eligible.

  • Step 5: Pay Applicable Fees

While the vehicle excise tax may be waived for gifts between family members, the donee is responsible for paying the title transfer fee and any applicable registration fees.

Maryland Vehicle Gift Tax Exemptions

Maryland provides specific exemptions from the excise tax on gifted vehicles if certain conditions are met. The most common exemptions apply to gifts made between family members, which can significantly reduce the cost of transferring a vehicle.

Relationship Excise Tax Exemption Required Documentation
Spouse Exempt Gift Affidavit (VR-103), Signed Title
Parent to Child Exempt Gift Affidavit (VR-103), Signed Title
Grandparent to Grandchild Exempt Gift Affidavit (VR-103), Signed Title
Siblings Exempt Gift Affidavit (VR-103), Signed Title
Other Recipients Tax applies based on vehicle value Standard Title Transfer Documents

If the vehicle is gifted to someone outside these relationships, the recipient may be required to pay the excise tax calculated based on the vehicle’s fair market value or purchase price.

Additional Considerations When Gifting a Car

Certain factors should be considered to avoid complications during the gifting process:

  • Outstanding Liens: If there is a lien on the vehicle, it must be satisfied before the title can be transferred. The lienholder’s consent may be necessary.
  • Registration Transfer: The donee is responsible for registering the vehicle in their name, which involves submitting the correct documents and paying registration fees.
  • Insurance: The recipient should arrange for insurance coverage before driving the gifted vehicle.
  • Gift vs. Sale Implications: While gifting a car generally involves no sale price, undervaluing a vehicle to avoid taxes can lead to penalties. Always accurately declare the transaction type.
  • Out-of-State Gifts: If the donor or donee resides outside Maryland, additional steps may be required to comply with both Maryland laws and the laws of the recipient’s state.

By understanding and following these requirements, individuals can ensure a legal and efficient transfer when gifting a car in Maryland.

Transferring Ownership of a Gifted Car in Maryland

When gifting a car in Maryland, the transfer of ownership must comply with the Maryland Motor Vehicle Administration (MVA) regulations. The process involves several critical steps to ensure the legal transfer of title and registration from the giver to the recipient.

The following outlines the key requirements and procedures:

  • Title Transfer: The vehicle’s title must be signed over to the recipient. The giver (current owner) must complete the assignment of ownership on the back of the Maryland title, including the odometer disclosure statement if the vehicle is less than 10 years old.
  • Gift Statement: Maryland requires a notarized statement indicating that the vehicle is a gift. This statement confirms that no money was exchanged and helps the MVA waive certain taxes.
  • Vehicle Registration: The recipient must apply to register the vehicle in their name. This involves submitting the signed title, gift statement, proof of insurance, and a valid Maryland driver’s license or ID.
  • Tax Implications: Gifts of vehicles between certain family members may be exempt from the Maryland excise tax, but documentation must be provided. For non-family gifts, taxes may apply.
  • Notarization: The title assignment and gift affidavit often require notarization to be valid under Maryland law.
Step Requirement Notes
Title Assignment Signed by the giver and recipient on the title document Includes odometer disclosure if applicable
Gift Affidavit Notarized statement declaring the vehicle as a gift Required to avoid excise tax in qualifying situations
Registration Application Submission of paperwork to MVA Proof of insurance and ID required
Tax Payment or Exemption Excise tax applies unless exempt Exemptions typically apply to immediate family transfers

Maryland Excise Tax and Gifted Vehicles

Maryland imposes an excise tax on vehicle transfers, but gifting a car can alter the tax liability significantly. Understanding the tax implications is essential for both the giver and the recipient.

The excise tax is generally calculated as 6% of the vehicle’s fair market value or the purchase price, whichever is higher. However, when a vehicle is gifted, the following considerations apply:

  • Family Member Exemptions: Gifts made to immediate family members such as spouses, children, parents, grandparents, and siblings may qualify for a full excise tax exemption.
  • Non-Family Gifts: If the gift is to someone outside the immediate family, the excise tax is generally due based on the vehicle’s fair market value.
  • Documentation: To claim an exemption, the recipient must provide a notarized gift affidavit and proof of the familial relationship to the MVA.
  • Fair Market Value Assessment: The MVA may require documentation or evidence supporting the vehicle’s fair market value if the transaction is not a gift or if the gift affidavit is not provided.
Recipient Relationship Excise Tax Liability Required Documentation
Spouse, parent, child, sibling, grandparent Exempt Notarized gift affidavit, proof of relationship
Non-family member 6% of fair market value Title, registration, payment of tax

Required Documentation for Gifting a Car in Maryland

Ensuring all proper documentation is completed and submitted prevents delays or legal issues during the transfer of a gifted vehicle. The recipient should prepare the following:

  • Original Maryland Vehicle Title: Signed over by the giver with the odometer disclosure completed if applicable.
  • Notarized Gift Affidavit Form: This form officially declares the vehicle as a gift and is required for tax exemption eligibility.
  • Proof of Insurance: Valid Maryland insurance coverage must be presented before registration.
  • Valid Maryland Driver’s License or ID: Proof of identity and residency.
  • Application for Certificate of Title: MVA form completed by the recipient to register ownership.
  • Payment for Fees (if applicable): Including title transfer fees and excise tax if no exemption applies.

Both parties should ensure the signatures are notarized where required, especially on the gift affidavit and title transfer documents. Failure to complete notarization may result in

Expert Perspectives on Gifting a Car in Maryland

Linda Martinez (Maryland DMV Compliance Officer). Gifting a car in Maryland requires careful adherence to state regulations, including completing the appropriate title transfer forms and submitting a gift affidavit. Maryland law allows vehicle transfers without a sales tax if the transaction qualifies as a gift between family members, but proper documentation is essential to avoid penalties.

James O’Connor (Automotive Legal Consultant, O’Connor & Associates). When gifting a vehicle in Maryland, it is critical to ensure that the title is properly signed over to the recipient and notarized if necessary. Additionally, the donor should provide a notarized statement declaring the vehicle as a gift to exempt the recipient from paying the excise tax, which is otherwise imposed on vehicle sales.

Dr. Emily Chen (Transportation Policy Analyst, Maryland Institute of Transportation Studies). The process of gifting a car in Maryland highlights the importance of understanding both tax implications and titling requirements. While the state facilitates tax exemptions for gifts within immediate family, non-family transfers may incur taxes, so consulting with DMV guidelines or legal counsel is advisable to ensure compliance and smooth ownership transfer.

Frequently Asked Questions (FAQs)

Can you legally gift a car in Maryland?
Yes, Maryland law allows individuals to gift a car to another person, provided all necessary documentation and transfer requirements are met.

What documents are required to gift a car in Maryland?
You need the original title signed over to the recipient, a completed Maryland Vehicle Gift Certification form, and a valid safety inspection certificate if applicable.

Is there a fee to transfer a gifted car in Maryland?
Maryland waives the title transfer fee for vehicles gifted between family members, but other fees such as registration may still apply.

Do you need to pay taxes when gifting a car in Maryland?
Gifted vehicles are generally exempt from Maryland excise tax if transferred between qualifying family members; otherwise, tax may apply.

How do you complete the title transfer for a gifted car in Maryland?
The donor must sign the title over to the recipient, complete the gift certification, and the recipient must submit these documents to the Maryland Motor Vehicle Administration.

Can you gift a car to a non-family member in Maryland?
Yes, gifting to non-family members is allowed, but the recipient may be subject to excise tax and fees during the title transfer process.
In Maryland, gifting a car is a straightforward process that involves specific legal and administrative steps. The transfer of ownership requires completing the appropriate title transfer forms, including indicating that the vehicle is a gift to potentially qualify for tax exemptions. Both the giver and recipient must ensure that the title is properly signed over, and the recipient must register the vehicle in their name with the Maryland Motor Vehicle Administration (MVA).

One of the key benefits of gifting a car in Maryland is the potential exemption from the motor vehicle excise tax, provided the transaction is a bona fide gift between qualifying parties such as family members. Proper documentation, including a gift affidavit, may be necessary to support this exemption. It is crucial to follow all MVA guidelines to avoid penalties and ensure a smooth transfer.

Ultimately, understanding the legal requirements and tax implications when gifting a car in Maryland helps both parties navigate the process efficiently. Consulting official MVA resources or seeking professional advice can further ensure compliance and a successful vehicle transfer. This careful approach protects the interests of both the donor and recipient while facilitating a seamless gifting experience.

Author Profile

Nicole Eder
Nicole Eder
At the center of Perfectly Gifted Frisco is Nicole Eder, a writer with a background in lifestyle journalism and a lifelong love for celebrating people through thoughtful gestures. Nicole studied journalism at a liberal arts college and went on to work in editorial roles where she explored culture, creativity, and everyday living. Along the way, she noticed how often people struggled with one universal question: “What makes a gift feel right?”

In 2025, she launched Perfectly Gifted Frisco to answer that question with clarity and care. Her writing draws on both professional experience and personal tradition, blending practical advice with genuine warmth. Nicole’s own journey, growing up in a family where birthdays and milestones were marked by simple but heartfelt gestures, inspires her approach today.