Both Ontario and British Columbia are set to implement a harmonized sales tax on July 1st, 2010, which combines the PST and the GST. And as that date draws closer more and more people are anticipating a pinch on their wallets.

Now the idea is that the taxes that businesses pay will go down making them more competitive and allow them to create more jobs and in theory pass on any savings to their respective customers.

Consumers, on the other hand, can expect increased taxes on some goods and increased taxes on the purchae of a home. Real estate experts and consultants say that the HST is not a good thing for buyers of a new or resale home. It is estimated that the new tax will add $2000 to the cost of buying a used home since HST will be applied to realtor commissions, lawyer's fees, home inspections, appraisals and renovations.

Assuming the HST kicks in July 1st 2010, what can you do about it? Simple, buy before that date to avoid the new tax. Buyers of used homes who purchase before July 1, 2010 will likely avoid paying the extra tax on the services to close their deal. 

Thinking of using your RRSP’s for your down payment?

When purchasing a home for some it could be difficult to find the money for a down payment. There is something available which is not that well known to home buyers, which is withdrawing from your Registered Retirement Savings Plan (RRSP) to fund the down payment. A RRSP is an account that benefits Canadians for their retirement years’ and all capital gains, interest income and dividends are tax free.

Withdrawing funds from the RRSP to purchase a home is known as Home Buyer’s Plan (HBP). Before you can even think about using the HBP the money must have been in your RRSP for a minimum of 90 days, before any tax liabilities come into play. The maximum that can be withdrawn is up to $25,000, for each individual. An example is if a husband and wife are purchasing a home together, each of them can withdraw a maximum of $25,000 therefore the total that can be taken out of the RRSP is $50,000.

 Using the HBP to withdraw money requires repayment of the funds. Repaying the funds must happen within a 15 year period. To calculate the minimum payment that should be paid back each year simply divide the total amount taken out by 15 years. If the maximum was taken out of $25,000, then the payments would be $1666.67 a year.

There are no tax liabilities when using the HBP, if the funds are paid back in time. If the amount is not repaid back in time, then the figure is added to your income for that year which is taxed. It is important to repay back the loan as soon as possible because it will reduce your tax bill and your savings will grow tax-free longer.

Staging a home is the act of preparing a home for sale in the real estate marketplace. Many things can be done during the staging process such as: painting, de-cluttering and re-designing. The goal of staging is to show potential buyers the appeal of the home, this in turn creates more buzz for the property and potentially a higher sale price.

Staging a home has many benefits such as:

1. It is much easier for realtors to show a property to potential buyers because they know the property will show well. Also, realtors are more often likely to show up for a brokers open-house, due to the staging which creates a buzz. This in turn will increase the number of showings.
2. By staging a home it will neutralize a properties appearance and buyers can visualize themselves living in the home.
3. Home stagers can tell a seller what will appeal to the current market and can make suggestions.
4. On average 94% of staged homes are sold within a month. Also, homes that were staged spent 80% less time on the market than ones that were not staged.
5. Roughly 10% of potential buyers can visualize living in a home. On the other hand 90% can not visualize living in a home.
6. Having a professional stage a property will create positive flow and takeaway the negative focus out of the home.