In Alberta, a builder sells a new home for $400,000. What is the GST amount the purchaser must pay?
Correct Answer
B) $20,000
Alberta has only GST (5%) as it does not participate in the HST system. On a $400,000 new home, the GST would be $20,000. Buyers may be eligible for the new housing GST rebate which can reduce this amount significantly for homes under certain price thresholds.
Why This Is the Correct Answer
In Alberta, new homes are subject to GST at 5% since Alberta does not participate in the HST system. On a $400,000 new home purchase, the GST calculation is $400,000 × 5% = $20,000. This GST applies to all new residential construction sales by builders, though purchasers may qualify for the new housing GST rebate to reduce this amount for eligible properties under certain price thresholds.
Why the Other Options Are Wrong
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- → In Ontario, what is the standard Land Transfer Tax rate for a residential property purchase of $400,000?
- → Which of the following best describes when land transfer tax is typically paid?
- → A first-time buyer purchases a $450,000 home in Ottawa, outside the City of Toronto. Which land transfer tax relief can they claim?
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