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  #1  
Old 2011-05-26, 05:42 PM
WGretzky WGretzky is offline
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Question Upgrade Calculation with Bonus

Hi all,
quick question - does anyone know (im with Tartan) when calculating total upgrades, whether taxes are calculated before or after the bonus is deducted?
just curious!

Thx
W
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Old 2011-05-26, 05:45 PM
Cosmogrrl Cosmogrrl is offline
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Bonus is deducted at the end, after taxes are added and your 10%deposit is deducted.
It is simply an amount that is taken off the total sale price at the end.
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Old 2011-05-26, 05:51 PM
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good2know good2know is offline
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have to check our last one, but paying tax on it seems strange - its a credit for items included in the original price
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Old 2011-05-26, 06:27 PM
Cosmogrrl Cosmogrrl is offline
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In our Tartan sale, it was included almost like payment in the breakdown, in the same area as the deposits were deducted.
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Old 2011-05-26, 08:03 PM
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Sara23 Sara23 is offline
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We had to pay taxes on our DC bonus with Urbandale and were told it was a standard practice.
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Old 2011-05-26, 08:26 PM
Natasha Natasha is offline
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I asked Tartan to give us preliminary price on a house. The bonus (5K) was subtracted before taxes were applied.
((Base house price + upgrades + lot premium - 5K bonus ) x 13% HST) - 24K PST rebate - re-calculated GST rebate.
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Old 2011-05-26, 09:59 PM
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SHARKMAN1 SHARKMAN1 is offline
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we had the same thing with Tartan...upgrades total -10% down - bonus = a x 13%
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Old 2011-05-29, 09:10 AM
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TMA28 TMA28 is offline
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Monarch told me the first 10K (my bonus) is exempt from HST...so I guess each builder does it differently.
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Old 2011-05-29, 11:55 AM
Alta_Danny Alta_Danny is offline
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I called CRA and faxed in the information for them to evaluate and here is their response to me:

A design centre bonus is an "incentive to buy" and not a discount and is therefore HST taxable as part of the PP.

If the seller where to call it a "discount" in advertisement material, CRA would rule (and has) that it would be an "incentive to buy" and they could be open to penalty.

If your builder either at the time of purchase or at the design centre purchase extended you personally (and not the Joe-Q-Public) a discount since they liked you or your are a great negotiator then that would not be taxable and would come off the total PP then the taxes calculated giving you a grant total.

As odd as this may be to us Joe-Q-Publics this is the word of the Tax Man
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Old 2011-08-09, 06:39 PM
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beulah beulah is offline
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Just thought I'd share our very recent Urbandale upgrade/bonus situation. Essentially the $4k design centre bonus isn't really $4k as others have mentioned. After seeking clarification on the breakdown of the final house price, here is what we received:


The DC bonus of $4,000.00 includes tax at a rate of 13%.

The upgrades done in the DC do not include tax.

Therefore in order to subtract the $4,000 (incl. tax) from the DC upgrades (without tax) tax needs to be added to the upgrades.

Once the $4000 has been subtracted from the DC upgrades with tax, the tax is backed out in order to add it to the base price of the home at which point the tax for the house as a whole is calculated factoring in applicable Rebates.


makes perfect sense, right!?!?!?!
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