Gifting a car in Massachusetts, step by step
Massachusetts treats a gifted vehicle almost exactly like a sold one. The title changes hands the same way, the recipient registers the same way, and the inspection clock runs the same way. The differences are two Department of Revenue forms that remove the 6.25 percent sales tax, and one word written on the title.
Step 1: Clear the loan first
A car with an active lien cannot be gifted. The lender holds an interest in the title until the loan is paid off and the lien release is issued. If there is still a balance, that gets resolved first, the same way it does in a sale, which we explain in selling a car with a loan.
Step 2: Sign the title over and write GIFT in the price field
Complete the assignment on the back of the certificate of title as if it were a sale: recipient name and address, odometer reading, date, both signatures. In the purchase price field, write the word GIFT clearly. That word is what connects the title to the tax exemption forms. The mechanics of the assignment are covered in how to transfer a car title in Massachusetts.
Step 3: Pick the right tax form
- Form MVU-26 for transfers between immediate family members: spouses, parents and children, and siblings. The transfer is exempt from sales tax and from the gift transfer fee.
- Form MVU-24 for gifts to anyone outside that circle: cousins, friends, in-laws. Still exempt from sales tax, but the RMV charges a 25 dollar gift transfer fee.
The giver signs the affidavit, the recipient brings it to the RMV. Without the form, the RMV assesses 6.25 percent tax on the book value of the car, gift or not.
Step 4: The recipient insures and registers
The recipient needs Massachusetts insurance before the RMV visit. Their insurance agent stamps the Registration and Title Application, and they bring the stamped RTA, the signed title, the MVU form, and payment for the fees to an RMV service center. Expect the standard 75 dollar title fee plus registration costs. Then the 7-day inspection rule applies, same as any newly registered car, as covered in our Massachusetts car inspection guide.
Step 5: The giver closes out plates and insurance
The plates never go with the gifted car. Take them off, transfer them to your next vehicle or cancel the registration, then end the insurance, in that order. If the excise tax year is partly unused, you may be owed an abatement. The full sequence is in what to do with your plates after selling a car.
When gifting is not actually the best move
Gifting makes sense when the recipient genuinely wants that specific car. It makes less sense when the family member really needs money, a different vehicle, or nothing at all, and the gift mostly transfers an obligation: insurance, excise tax, inspection, parking. In those cases, selling the car and gifting the proceeds is often kinder. If you want to know what the car is actually worth before deciding, here is how the value is determined, and a written offer from us takes a few minutes to request and carries no obligation.
Do I have to pay taxes on a gifted car in Massachusetts?
No sales tax is due when the transfer is documented with Form MVU-26 (immediate family) or MVU-24 (other gifts). Without the form, tax is assessed on the book value.
Is there a fee for gifting a car in Massachusetts?
Immediate family transfers with MVU-26 skip the gift fee. Other gifts with MVU-24 pay a 25 dollar gift transfer fee. The recipient pays the normal 75 dollar title fee and registration costs in both cases.
Can I gift a car to someone in another state?
The Massachusetts side works the same, but the recipient registers under their own state rules and taxes. Check the destination state before assuming the exemption travels with the car.
Can I sell a car for one dollar instead of gifting it?
The one-dollar sale is a myth that backfires. The RMV taxes the higher of the price or the book value, so a 1 dollar bill of sale still triggers tax on the full book value. The MVU forms exist precisely so you do not need the trick.
Does the gifted car need a new inspection?
Yes. Within 7 days of the new registration, like any other newly registered vehicle.
Where We Buy Cars
We buy cars across Greater Boston, MetroWest, the North Shore, the South Shore, Cape Cod, Seacoast New Hampshire, Rhode Island.
Popular towns: Newton, Somerville, Cambridge, Worcester, Providence, Manchester, Brookline, Waltham.
Selling a specific make? See the brands we buy: BMW, Mercedes-Benz, Porsche, Toyota, Honda, Jeep, Tesla, Lexus and more.
