Are you planning to gift a vehicle to a loved one and want to avoid unnecessary fees? In Minnesota, more than 20,000 family-to-family title transfers occur each year thanks to a specific gift sales-tax exemption.
Understanding the state’s requirements and leveraging local resources can save you time, money, and paperwork headaches.
Key Takeaways
- Only transfers between spouses, parents/children, siblings, or grandparents/grandchildren get the 6.5 % sales-tax exemption
- You need a notarized title, PS2000 form, PS20054 affidavit, proof of relationship/ID, and odometer disclosure (if <10 years old)
- Pay $8.25 for title plus $30–$120 registration; expect your new title in about two weeks
- Double-check that names, VINs, and dates match on every document to prevent delays
Eligibility and Relationship Definitions
Transfers qualify for the gift exemption when the donor and recipient are spouses, parents and children (including adopted and stepchildren), siblings, or grandparents and grandchildren.
Proof of relationship, such as a birth certificate or marriage license, is required. Nonqualified transfers incur the standard 6.5 percent motor vehicle sales tax, calculated on the vehicle’s market value.
Counties may ask for supporting documents, so gather originals and copies to ensure a smooth process.
Who Counts as Family
- Spouses
- Parents and children
- Siblings
- Grandparents and grandchildren
Who Does Not Qualify
- Cousins
- Aunts and uncles
- Friends
Required Documents
You must present a complete set of forms and verifications at your county deputy registrar office:
- Original Certificate of Title with the donor’s notarized release-of-interest signature
- Application for Certificate of Title and Registration (PS2000) completed by the recipient
- Gift Motor Vehicle Affidavit (PS20054) for family transfers
- Proof of identity (driver’s license) and relationship (birth or marriage certificate)
- Odometer Disclosure Statement if the vehicle is under ten years old
Ensure names, VIN, and dates match exactly across all documents. Incomplete or mismatched paperwork leads to delays and rejection of your filing
Step-by-Step Transfer Process
- Donor Signs and Notarizes the Title
The current owner signs the release-of-interest section on the title exactly as their name appears on the front. A notary public must witness and stamp this signature to authenticate the transfer. - Complete Application and Affidavit
The recipient fills out the Minnesota Title and Registration Application (PS2000) and, if qualifying as a family gift, the Gift Motor Vehicle Affidavit (PS20054). Accuracy is crucial: mismatched VINs, names, or dates between forms will delay processing. - Submit Documents and Pay Fees
Bring all completed forms, the original title, and proof of relationship to a county deputy registrar office. Pay the $8.25 title fee and registration fees ranging from $30 to $120 depending on vehicle type and plate choice. Counties may accept checks, credit cards, or cash. - Receive Temporary Permit and Final Title
If needed, the registrar issues a temporary permit allowing you to drive legally while your paperwork is processed. Expect your new title and registration sticker in the mail within two weeks. Retain all receipts and copies until the process is complete.
Processing times vary by county and season. Scheduling an appointment or arriving early can significantly reduce wait times.
Fees and Tax Considerations
Minnesota waives the 6.5 percent motor vehicle sales tax when a vehicle transfers as a bona fide family gift. This exemption can save hundreds of dollars on higher-value vehicles.
Despite the tax break, you remain responsible for the standard title and registration fees.
| Fee Type | Amount |
| Title Fee | $8.25 |
| Registration Fee | $30–$120 |
| Sales Tax (non-gift) | 6.5% of market value |
| Late Transfer Penalty | Varies by county |
Nonfamily transfers incur full sales tax based on the vehicle’s market value at the time of sale. Completing the transfer more than 30 days after the gift date may trigger a late-transfer penalty, typically a flat fee or percentage of the title fee.
Always check the Minnesota Department of Revenue for current rates and ask your registrar about any county-specific charges.
Common Pitfalls and Tips
- Verify that names, VINs, and dates match exactly on all forms to avoid application rejection.
- Maintain continuous insurance coverage by adding the new owner promptly to avoid registration holds or penalties.
- Confirm odometer disclosures on both the title and PS20041 form when required; discrepancies can lead to branded titles.
- Keep two sets of photocopies and a digital backup of all submitted documents in case the registrar office needs resubmission.
Why Auctions Are a Smart Choice
When you’re building your inventory, using auctions can be a smart choice for sourcing vehicles. Twin Cities Auctions, based in Minnesota, is one such reputable auction house that offers a wide range of vehicles at competitive prices.
Key Benefits of Buying from Auctions:
- Wide Selection: Auctions like Twin Cities Auctions offer a variety of vehicles, from low-budget cars to high-end models.
- Competitive Pricing: Auctions often offer vehicles at prices below retail value, enabling dealers to maximize their profit margins.
- Transparency: Auctions provide full vehicle history reports, so you know exactly what you’re buying.
- Convenient Bidding: Many auctions offer online bidding for your convenience, making it easier to source vehicles without being physically present.
Twin Cities Auctions: A Smart Vehicle Sourcing Choice
For those in the automotive industry, Twin Cities Auctions offers an excellent platform for sourcing quality vehicles at competitive prices.
Whether you are just starting or expanding your business, this auction house provides transparency, competitive pricing, and a broad selection.
| Feature | Description |
| Inventory Variety | Wide range of cars, trucks, and SUVs available |
| Competitive Pricing | Below-market pricing allows for higher profit margins |
| Vehicle History Reports | Detailed history reports for every vehicle |
| Online Bidding | Convenient online bidding options for dealers |
| Financing Options | Financing available to help with inventory purchases |
Conclusion
Transferring a vehicle title to a family member in Minnesota is straightforward when you understand eligibility criteria, prepare the required documents correctly, and follow each step precisely.
By leveraging the state’s gift-transfer exemption, you can avoid the 6.5 percent sales tax and limit your out-of-pocket costs to standard title and registration fees.
Planning ahead, verifying paperwork details and considering reputable sources like Twin Cities Auctions, will help you complete the transfer smoothly, safely, and cost-effectively.
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Searching for your next vehicle? Twin Cities Auctions offers an online, transparent car auction experience that’s accessible to everyone, no dealer license needed. Browse and bid on a diverse selection of quality vehicles from the comfort of your home.
Whether you’re a first-time buyer or an experienced trader, our clear, honest bidding process ensures you can make informed decisions in a supportive environment. Join our next online auction and discover how effortless and enjoyable finding your next car can be with Twin Cities Auctions!
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FAQ
What validates a family gift exemption in Minnesota?
A properly completed Gift Motor Vehicle Affidavit and proof of relationship such as a birth or marriage certificate are required.
How long does a title transfer take?
Once paperwork is accepted and fees paid, the new title and registration arrive by mail within two weeks.
Can I transfer a title online?
Minnesota does not currently support online family title transfers; all documents must be submitted in person.
Are there exemptions for military spouses?
Military spouses may qualify for special exemptions; consult your county registrar for details.
What if the donor’s name changed?
Provide legal documentation such as a marriage certificate or court order linking the donor’s previous and current names.
Is a lien release required?
If the vehicle has an active lien, obtain a written lien release from the lender before transferring the title.
Do I need a separate odometer disclosure form?
Yes; vehicles under ten years old require either the disclosure on the title itself or a PS20041 form.
What happens if forms are incomplete?
Incomplete or mismatched forms are rejected, causing delays; double-check all entries before submission.
Source Links
https://dps.mn.gov/divisions/dvs/forms-documents/Pages/application-for-certificate-of-title.aspx
https://dps.mn.gov/divisions/dvs/forms-documents/Pages/gift-motor-vehicle-affidavit.aspx
https://www.revenue.state.mn.us/motor-vehicle-sales-and-use-tax
https://www.carfax.com/
https://www.bbb.org/
https://www.reddit.com/r/Autos/
https://www.autotrader.com/