Gifting a Car in Connecticut: Taxes, Fees & Rules (2026)
Immediate family (spouse, parent, sibling, child, civil-union partner) transfers are exempt if the vehicle was registered to the relative for at least 60 days and previously taxed. Gifts are exempt with Form AU-463. The title fee of $25 still applies. Verified against official Connecticut sources on 2026-07-17.
Gift vs. selling for $1: don't use the $1 trick
The old advice to "sell it for a dollar" usually backfires. A $1 sale is still a sale — in states that tax the higher of price or book value, that means tax on the full book value; in others it simply voids the gift exemption you were entitled to use. The documented gift route (affidavits, the right box on the title) is what actually produces $0 tax where an exemption exists.
What you'll still pay in Connecticut
Even a fully exempt gift pays the standard title transfer fee of $25. The recipient also takes on normal registration costs going forward. Connecticut publishes no hard transfer deadline or late fee — but you can't legally drive until the vehicle is registered, and driving with out-of-state plates as a resident is a $250 infraction.
Good to know
- Titles are only issued for vehicles 20 model years old or newer.
Frequently asked questions
Do you pay taxes on a gifted car in Connecticut?
Immediate family (spouse, parent, sibling, child, civil-union partner) transfers are exempt if the vehicle was registered to the relative for at least 60 days and previously taxed. Gifts are exempt with Form AU-463.
Is it better to gift a car or sell it for $1 in Connecticut?
Gift it — properly. A $1 "sale" is still a sale in most states and can trigger tax on book value or invite a review, while a documented gift uses the actual exemption. Immediate family (spouse, parent, sibling, child, civil-union partner) transfers are exempt if the vehicle was registered to the relative for at least 60 days and previously taxed. Gifts are exempt with Form AU-463. Follow the gift procedure, not the $1 shortcut.
What does the title transfer cost on a gifted car in Connecticut?
The title fee is $25 — that's due on gifts too, even when the tax is exempt. Connecticut publishes no hard transfer deadline or late fee — but you can't legally drive until the vehicle is registered, and driving with out-of-state plates as a resident is a $250 infraction.
Does the IRS tax a gifted car?
Almost never for normal vehicles — car values fall under the IRS annual gift-tax exclusion for most givers, so no federal gift tax or return is required. The state-level rules above are what actually matter.
Verified against official sources (portal.ct.gov, portal.ct.gov) — last reviewed 2026-07-17. Estimates are informational only.