A developer constructs a brand new condominium unit in Toronto and sells it to an individual for use as their primary residence. The purchase price stated in the Agreement of Purchase and Sale is $750,000. Assuming the buyer qualifies for the full New Housing Rebate (NHR), which of the following statements regarding HST is most accurate?

Question: A developer constructs a brand new condominium unit in Toronto and sells it to an individual for use as their primary residence. The purchase price stated in the Agreement of Purchase and Sale is $750,000. Assuming the buyer qualifies for the full New Housing Rebate (NHR), which of the following statements regarding HST is most accurate?

Answer options:

• The developer will collect HST at 13% on the $750,000, and the buyer will apply separately to the CRA for the NHR. ✅ The HST at 13% is generally included in the purchase price, and the developer typically credits the NHR directly to the buyer on closing.
• The transaction is exempt from HST because it is a primary residence.
• The buyer must pay HST at 13% on the full $750,000, as the NHR only applies to houses under $450,000.

Correct answer: The HST at 13% is generally included in the purchase price, and the developer typically credits the NHR directly to the buyer on closing.

Explanation: For new residential properties, the HST is typically incorporated into the purchase price. The developer, as the builder, is generally responsible for remitting the HST and will often apply for the New Housing Rebate on behalf of the buyer and credit it against the purchase price on closing, provided the buyer qualifies. This simplifies the process for the buyer.