Car Title Transfer Between Family Members in Illinois
How to transfer a car title to a family member in Illinois tax-free — qualifying relationships, required affidavits, title fees, and the complete step-by-step process.
Illinois exempts qualifying family transfers from the Private Party Vehicle Use Tax under 35 ILCS 105/7. The transfer must be a gift — no consideration paid. The Form RUT-50 (Private Party Vehicle Use Tax Transaction) is used to document the exemption.
Required Documents in Illinois
Illinois's $150 title fee is the highest among major states — budget for it. The use tax exemption for family gifts is the main financial benefit. Illinois siblings and grandparents/grandchildren qualify for the exemption. Complete the transfer within 30 days.
Frequently Asked Questions
Which family relationships are exempt from sales tax on car transfers in Illinois?
Spouse, Parent to child, Child to parent, Brother, Sister, Grandparent, Grandchild. Illinois exempts qualifying family transfers from the Private Party Vehicle Use Tax under 35 ILCS 105/7. The transfer must be a gift — no consideration paid. The Form RUT-50 (Private Party Vehicle Use Tax Transaction) is used to document the exemption.
Do I need a gift affidavit to transfer a car to a family member in Illinois?
Yes. Illinois requires Form RUT-50 to document the transfer and claim the family gift exemption. The "gift" box must be checked and the qualifying relationship stated. No cash value should appear on the form for a gift transfer.
How much is the title fee for a family car transfer in Illinois?
$150. Illinois's $150 title fee applies to all transfers including family gifts. This is one of the highest title fees nationally. The exemption covers use tax (6.25%+), not the title fee.
Does a car gift trigger gift tax in Illinois?
No state gift tax. Illinois has no state gift tax. Federal gift tax rules apply. Illinois's family transfer exemption saves 6.25%+ use tax on the vehicle's market value.
What documents do I need to transfer a car title to a family member in Illinois?
Required documents: Application for Vehicle Transaction (VSD 190), Form RUT-50 (Private Party Use Tax), Odometer disclosure statement, Signed title assignment, Proof of insurance, Illinois driver's license. Illinois's $150 title fee is the highest among major states — budget for it. The use tax exemption for family gifts is the main financial benefit. Illinois siblings and grandparents/grandchildren qualify for the exemption. Complete the transfer within 30 days.
Can I sell a car to a family member for $1 to avoid sales tax in Illinois?
In most states, selling for $1 does not qualify as a gift — the state will assess tax on the fair market value. To qualify for the family gift exemption in Illinois, the transfer must be documented as a gift with no consideration paid. Use the proper gift affidavit and do not list any dollar amount as the sale price.