Newbie here and couldn’t find this answer in a search here.
I am considering taking over a lease here in Texas. We’re both in the state and it is through GM Financial. The current owner/leaser says the sales taxes are built into the payments.
My question is, when the vehicle is transferred will I have to redo the taxes or owe any taxes beyond the current monthly payment? Again this is in Texas. Thank you!
Texas state laws consider the sale of a vehicle by a lease company at lease-end to be a separate sale, although a special one, and the lessee is not charged sales tax again if the correct amount of tax was paid originally at the beginning of the lease.
What this means is, if the current lessee has paid Sales Taxes for the full purchase price of the car or he has rolled them into the lease, then you are not responsible for paying the sales tax again at the end of the lease if you want to use the buyout option.
Thanks, but what about a lease transfer? From what you wrote it sounds like I will not have to pay any tax since the lease itself remains intact, just assigned to a new person.
Here is where it gets tricky. I will post my 2c but hope others can chime in.
In TX, the dealer is the lessor and has to pay the taxes to the state, but no one does that and it simply gets passed on to the lessee.
I have done a couple of swaps on swap a lease and was given the option of purchasing at lease end for the buyout price and not pay taxes, but YMMV
Thanks, I do not intend to keep the car unless I love the car and the purchase price is really, really good. My initial question was about the transfer itself. Will I owe and taxes after the transfer, and separately I guess, will I owe any if I give the car back and don’t purchase?
None for the transfer - No taxes, just the transfer fee to Credit Union/Manufacturer Finance Cmp
No taxes during lease return - Any end of lease fee + wear and tear
In short -NO
No. You will not owe taxes on a lease transfer in texas.
I did one for my BMW a year ago and no one paid anything.
The reason is the tax is paid at the point of sale when the lease started…either it is rolled into the lease (and thus a bigger monthly payment) or paid up front. Either way u do not owe taxes again…unless you buy the car at the end of the lease (that’s considered another “sale”).
Did you do the transfer at a dealer? How did you handle the new registration? At local tax office but no tax due?
I have a similar situation in texas. Looking to take over a GM lease. I took over a lease from california, and the tax office made me pay $4500 in taxes for my M3 up front. It sucked but Im force to keep the car now. If you trasnfer from Texas to Texas will i get bent over at the tax office again?
I swapped a lease from Florida to Texas and had to pay taxes when I registered the car. All had to be paid up front. I think it depends on how the taxes were paid in the previous state but not sure. It could certainly make or break a deal for me next time I swap.