First of all, the new HST (commenced on July 1, 2010) will not be a major factor in the real estate market as it doesn’t apply to most resale properties. It will however affect the taxes on the cost of services related to the real property transaction (Closing costs).

For first time home buyers, this process may seem intimidating and even stressful. Having said that, the government is trying to encourage those who haven’t owned an interest in property at all, anywhere in the world by giving a rebate of the land transfer tax for houses priced under $400,000. So this means that you won’t pay more tax than the current PST/GST system.

Buyers of new homes can get a rebate of up to $24,000 regardless of the price of home.

Another tip for first time home buyers, is that the government has also allowed you to use your RRSPs towards your downpayment of your house. Upto $25,000 in your RRSP reserves, you get 15 years to put it back into your RRSP tax free.

What are your biggest fears in buying your first home?