Total Home Purchase Price Calculation For Ontario. Help needed.

[M & M]

Hi all,

Here is the situation.

I bought a home and signed the purchase agreement in June 2007 (GST at that time at 6%). Closing date will be Oct 2008 (GST is currently at 5%). Now that all the amendments, selections and upgrades are finalized, I asked my builder a couple of weeks ago to provide me of the total building cost for my home to allow me to verify what I owe them and ensure my finance are in order when the final payment will come. I just got this from my builder.

A) Sales Price (GST Included): $350,000

B) Net builder sales price (Excluding GST): $337,057.01
(I think this amount the is sales price excluding the 3.84% of GST. I am not sure if this rate is OK given that this rate is based on the standard GST at 6% at the time of the purchase. Should it be different now that the GST is 5%)

C) All the change orders (Excluding GST): $20,000.00
(This is for all the upgrades)

D) Sub-Total (Excluding GST): $357,057.01 (B+C)

E) GST at 6%: $21,423.42
(=0.06*D Again for this, I am not sure if the 6% is applicable given that the current rate is 5%)

F) Credit GST rebate assigned to the builder: -$7,712.43
(I think this amount is = D*(6%-3.84%). Is it right?)

G) Total Purchase Price Including GST: $370,768 (D+E+F)

I would like to have your comments on whether the calculations provided in A) to G) are correct? I am also a little bit confused about the GST rate of 6% used by the builder given the rate at closing time is 5%. Anything wrong? Please explain where the errors are and what should be there instead.

Many Thanks!

M & M

[Q-Ball]

Is this a brand new home? Did you go through a real estate agent? If so, I'd contact him/her.

[M & M]

Is this a brand new home?

Yes it is.

That is what I got from my builder basically telling me about what I owe them at closing date. That takes into account the rebate assigned to the builder.

I am just trying to figure out if their calculations are correct and I am not sure because of the GST rate change in the last year and how the GST is applied given the rebate.

I know that I will need to apply, after closing, for the transitional rebate that is paid to homeowner only. So the calculations must allow me to know exactly what I owe the builder after applying all the taxes and rebates assigned to the builder.

Thanks!