A buyer is purchasing a newly constructed condominium from a builder in Toronto. The agreed-upon purchase price is $800,000, and this price is stated to 'include HST'. Which of the following statements is true regarding HST on this transaction?

Question: A buyer is purchasing a newly constructed condominium from a builder in Toronto. The agreed-upon purchase price is $800,000, and this price is stated to 'include HST'. Which of the following statements is true regarding HST on this transaction?

Answer options: ✅ The builder is responsible for remitting the HST to the Canada Revenue Agency (CRA), and the buyer has no further HST obligation.

• The buyer must pay the 13% HST on top of the $800,000 purchase price, unless they qualify for a rebate.
• The buyer can claim a rebate of the federal portion of the HST, directly from the builder at closing.
• The HST does not apply to condominiums in Ontario, only to detached homes.

Correct answer: The builder is responsible for remitting the HST to the Canada Revenue Agency (CRA), and the buyer has no further HST obligation.

Explanation: When the purchase price 'includes HST', it means the builder has factored the HST into the stated price. The builder, as the vendor of a newly constructed residential property, is responsible for collecting the HST and remitting it to the CRA, as per the Excise Tax Act. The buyer is not typically directly involved in the HST remittance process in such cases.