Statement of Adjustment Question

Overall tax percentage in Canada is 13% that we generally pay for everything we buy. According to the SOA, they basically break down the 13% into the 2 portions one is federally (5%) and the remaining 8% is provincially. If you add those two together it adds up to the 13%.

The $734,769 is the NET sales price that the builder priced the home at BEFORE they added the 13% tax to the price which amounts to your "agreed purchase price" of the time you have signed the agreement.

Generally if you are buying a new preconstruction home from a builder, they have already factored in "the tax" into the purchase price assuming that it is going to be your principal residence. If this home is going to be your principal residence then the builder states the NET price of the home in order to claim the HST Rebate from CRA which leaves you off the hook from paying the tax on closing. If this were an investment property, then you would have to pay the federal portion of the tax on top of the purchase price agreed on closing and will have to fill out the necessary forms to claim a rebate of up to $24,000 of the tax you paid.

The rebate is added to the TOTAL including HST, then divided by 1.13 to get the Net Sale Price:
($806,289.62 + $24,000) / 1.13 = $734,769.57