If you’re moving to Canada permanently, you may be able to import your personal vehicle free of customs duty and GST/HST under Tariff Item 9807.00.00, commonly known as the Settler’s Effects Exemption. Qualifying vehicles are also generally exempt from Canada’s 25% surtax on certain U.S.-made vehicles, making this one of the most valuable customs benefits available to new immigrants.
To qualify, you must meet two requirements. First, you must be considered a settler under Canada Border Services Agency (CBSA) rules. Second, your vehicle must satisfy specific ownership and use conditions before it arrives in Canada. This guide explains who qualifies, how the exemption works, and what steps you need to take before importing your vehicle.
Tariff Item 9807.00.00 Makes a Settler’s Vehicle Duty and Tax Free
Tariff Item 9807.00.00 of the Customs Tariff allows eligible settlers to import their personal and household effects, including one or more qualifying motor vehicles, without paying customs duty or GST/HST.
The exemption is administered by the Canada Border Services Agency (CBSA) under Memorandum D2-2-1 and is intended to help individuals who are establishing a residence in Canada for the first time. It applies only to goods imported for personal use and is not available for vehicles imported for resale, commercial use, or business inventory.
For many newcomers, this exemption can save thousands of dollars in import costs, especially when combined with the exclusion from Canada’s current U.S. vehicle surtax.
Settler Status Depends on Residence Intent, Not Citizenship
Many people assume the exemption is available only to Canadian citizens or permanent residents. In reality, your immigration status is not the deciding factor.
CBSA defines a settler as someone entering Canada to establish, for the first time, a residence that they intend to maintain for at least 12 months. This means eligibility is based on your intention to make Canada your primary home rather than your citizenship.
People who commonly qualify include:
- New permanent residents
- Protected persons
- Individuals immigrating to Canada for the first time
The following individuals are not considered settlers under Tariff Item 9807.00.00:
- Former Canadian residents returning after living abroad
- International students
- Temporary foreign workers
- Visitors
Former residents may qualify for relief under Tariff Item 9805.00.00, which has different eligibility rules. Temporary residents import their vehicles under separate temporary import provisions rather than the Settler’s Effects Exemption.
Qualifying as a settler does not automatically make your vehicle eligible for duty-free importation.
To receive relief under Tariff Item 9807.00.00, your vehicle must have been part of your personal effects before you moved to Canada. According to CBSA guidelines, the vehicle must have been:
- Owned by you before arriving in Canada
- In your possession while living abroad
- Used by you before importation
- Licensed and insured in your name
- Driven on public roads outside Canada
These requirements help demonstrate that the vehicle was genuinely used as your personal transportation rather than purchased solely to benefit from the customs exemption.
There Is No Minimum Ownership Period for Settlers
One of the most common misconceptions online is that settlers must own their vehicle for at least six months before moving to Canada.
That is incorrect.
For settlers importing under Tariff Item 9807.00.00, there is no minimum ownership period.
The six-month ownership requirement applies only to former residents importing vehicles under Tariff Item 9805.00.00. Unfortunately, several websites incorrectly apply that rule to settlers, creating unnecessary confusion for newcomers.
Can You Import a Leased or Financed Vehicle?
Whether a vehicle qualifies also depends on its ownership status.
A leased vehicle generally does not qualify under the Settler’s Effects Exemption because the importer does not own the vehicle.
A financed vehicle, however, can qualify because financing does not prevent you from being recognized as the owner for CBSA purposes. If the vehicle is being exported from the United States, you must still satisfy any lienholder requirements and complete the U.S. export process before the vehicle can leave the country.
The 25% U.S. Vehicle Surtax Does Not Apply to Settlers’ Effects Vehicles
Since April 2025, Canada has imposed a 25% surtax on certain motor vehicles imported from the United States.
Fortunately, vehicles imported under Tariff Item 9807.00.00 are generally excluded from this surtax because qualifying Chapter 98 tariff items are outside the scope of the surtax order unless specifically listed in Schedule 2.
For many people relocating from the United States, this exemption represents the largest financial saving available when importing a personal vehicle into Canada. Because surtax regulations can change, it’s always advisable to verify the latest requirements before shipping your vehicle.
The BSF186 Declaration Covers Your Vehicle and Goods to Follow
When you enter Canada as a settler, you must complete Form BSF186, formerly known as Form B4.
This declaration allows you to list:
- Goods accompanying you when you arrive
- Goods that will be imported later (“goods to follow”)
If your vehicle will arrive after you do, it must be included on your original goods-to-follow list. Vehicles that are not declared at your first point of entry may lose their eligibility for duty and tax relief when they are imported later.
There is generally no deadline for importing goods that were properly declared as goods to follow, but any undeclared items imported later may be assessed under the normal customs rules.
Transport Canada Admissibility and the RIV Program Apply Separately
Receiving customs relief under Tariff Item 9807.00.00 does not automatically make your vehicle legal to drive in Canada.
Most U.S.-market vehicles that are less than 15 years old must still comply with Transport Canada’s import requirements and complete the Registrar of Imported Vehicles (RIV) program. This may include inspections, recall clearance, and vehicle modifications before provincial registration.
Vehicles built for markets other than the United States are generally inadmissible until they are at least 15 years old unless another exemption applies.
In short, customs eligibility and vehicle admissibility are separate requirements. Your vehicle must satisfy both before it can be registered and legally driven in Canada.
The 12-Month Disposal Restriction Protects the Relief
The Settler’s Effects Exemption comes with an important condition after your vehicle enters Canada.
If you sell, give away, transfer, or otherwise dispose of your vehicle within 12 months of importation, the customs duty and taxes that were waived under Tariff Item 9807.00.00 may become payable.
To enforce this requirement, the Canada Border Services Agency (CBSA) records the restriction when the vehicle is imported. This helps ensure that the exemption is used only by people genuinely relocating to Canada rather than by individuals importing vehicles for resale.
In most cases, once the 12-month period has passed, you are free to sell or transfer the vehicle without affecting the original customs relief.
Former Residents Follow Different Rules Under Tariff Item 9805.00.00
People returning to Canada after living abroad are not considered settlers under Tariff Item 9807.00.00.
Instead, they may qualify for relief under Tariff Item 9805.00.00, which applies to former residents who have been outside Canada for at least one year.
Unlike the settlers’ exemption, this tariff item includes additional requirements and limitations.
For example, most goods, including vehicles, must have been:
- Owned abroad for at least six months
- In the person’s possession abroad for at least six months
- Used abroad for at least six months before returning to Canada
The six-month ownership requirement is often mistakenly applied to settlers, but it applies only to former residents importing under Tariff Item 9805.00.00. After an absence of at least five years, this six-month requirement may be waived.
Vehicles Worth More Than $10,000
Former residents should also understand that vehicle relief works differently than it does for settlers.
If a qualifying vehicle is worth more than CAD $10,000, only the first $10,000 of its value receives duty relief under Section 84 of the Customs Tariff.
The remaining value may still be subject to customs duty and GST/HST. In addition, any applicable air conditioning excise tax and Green Levy continue to apply where required.
This is another major distinction between Tariff Items 9805.00.00 and 9807.00.00 that often causes confusion among returning Canadians.
Foreign nationals entering Canada on temporary status do not qualify for the Settler’s Effects Exemption.
This includes:
- Temporary foreign workers
- International students
- Visitors
- Individuals entering Canada on temporary permits
These individuals may be able to import a vehicle temporarily without paying customs duty, but the vehicle generally:
- Cannot be sold while in Canada
- Must leave Canada when the authorized stay ends unless formally imported
- Is not processed through the Settler’s Effects program
A common question arises when someone enters Canada on a work permit and later becomes a permanent resident.
In that situation, the vehicle must be formally imported after permanent residence is granted. Generally, only goods owned, possessed, and used before the permanent residence application date qualify for relief under Tariff Item 9807.00.00.
The Costs That Still Apply When You Move With a Vehicle
Although the Settler’s Effects Exemption eliminates customs duty and GST/HST on a qualifying vehicle, importing a vehicle into Canada is not completely free.
Depending on your circumstances, you may still need to pay for:
- Registrar of Imported Vehicles (RIV) program fees
- Required vehicle modifications
- Federal vehicle inspection
- U.S. export formalities, including title submission before export
- Provincial vehicle registration
- Licence plates
- Automobile insurance
- Provincial taxes or fees that may apply during registration
These costs vary depending on the vehicle, province, and country of export. Before arranging shipment, it is worth confirming both the customs requirements and the admissibility requirements to avoid unexpected delays or expenses.
Frequently Asked Questions
Do I pay duty and tax on my car when I move to Canada?
If you qualify as a settler under Tariff Item 9807.00.00 and your vehicle meets CBSA’s ownership and use requirements, you can generally import your personal vehicle without paying customs duty or GST/HST.
Does the 25% surtax on U.S. vehicles apply if I am moving to Canada?
Generally, no. Vehicles imported under the Settler’s Effects Exemption are normally excluded from Canada’s 25% surtax because qualifying Chapter 98 tariff items fall outside the surtax order unless specifically listed.
Can I bring a leased or financed car to Canada as a settler?
A financed vehicle can generally qualify if you meet the ownership requirements and satisfy any lender requirements for export. A leased vehicle typically does not qualify because you are not considered the owner for customs purposes.
Can I sell my car after moving to Canada?
Yes, but you should wait at least 12 months after importation. Selling or otherwise disposing of the vehicle within the first year may result in the customs duty and taxes becoming payable.
Do work permit holders qualify for the Settler’s Effects Exemption?
No. Temporary foreign workers, students, and visitors are not considered settlers under Tariff Item 9807.00.00. They import vehicles under Canada’s temporary import rules instead.
Final Thoughts
The Settler’s Effects Exemption under Tariff Item 9807.00.00 can significantly reduce the cost of moving to Canada with your personal vehicle. By eliminating customs duty, GST/HST, and, in many cases, the 25% U.S. vehicle surtax, the exemption provides substantial savings for eligible newcomers.
However, eligibility depends on more than simply moving to Canada. You must qualify as a settler, your vehicle must satisfy CBSA’s ownership and use requirements, and you must continue to comply with Transport Canada’s admissibility standards. Understanding these rules before your move can help you avoid unnecessary costs, customs delays, and compliance issues.
If you’re planning to relocate to Canada with your vehicle, preparing your documentation early and understanding the import process can make your transition significantly smoother.
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Moving to Canada With Your Vehicle: Settler’s Effects Exemption Guide (2026)
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Moving to Canada with your vehicle? Learn how the Settler’s Effects Exemption (Tariff Item 9807.00.00) lets eligible newcomers import a personal vehicle duty-free, avoid GST/HST, understand CBSA rules, RIV requirements, and Canada’s U.S. vehicle surtax.
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Moving to Canada With Your Vehicle – Settler’s Effects Exemption Guide
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Laptop displaying CBSA vehicle import documents beside a Canadian flag, illustrating the Settler’s Effects Exemption for importing a personal vehicle duty-free when moving to Canada.
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Illustration representing Canada’s Settler’s Effects Exemption under Tariff Item 9807.00.00, showing customs paperwork, a Canadian flag, and vehicle import documents for newcomers relocating permanently to Canada with a personal vehicle.
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Eligible newcomers can import a qualifying personal vehicle duty-free under Canada’s Settler’s Effects Exemption (Tariff Item 9807.00.00), provided CBSA ownership and use requirements are met.
