First Home Saver Accounts - Helping Achieve Home Ownership Sooner
Saturday, October 18 2008
First Home Saver accounts are set to help young Australians get into the housing market sooner, with a system that:
- rewards disciplined savings with Government bonuses;
- encourages saving over a longer term;
- maximises savings through low tax rates;
- helps reduce inflationary pressures.
First Home Saver accounts will attract bonus money from the Government and benefit from low tax rates, so for example a couple each earning average incomes and putting aside 10 per cent of their money into a First Home Saver account, could save a deposit of more than $88,500 after five years of disciplined savings. This is up to $12,600 more than they would have saved otherwise.
A Better Way To Save
The benefit of First Home Saver accounts over traditional savings accounts is:
- The Government will pay a bonus contribution on the first $5,000 of individual contributions made each year, and individuals can contribute a maximum of $10,000 each year.
- The Government contribution will be 17% on the first $5,000 (indexed) of individual contributions made each year, e.g., Jill contributes $5,000 in the 2008/09 financial year and receives a Government contribution of $850 into her FHSA.
- Investment earnings or interest that accrues in First Home Saver accounts will be taxed at a low 15 per cent.
- Withdrawals will be tax free where they are used to purchase a first home to live in.
There are several conditions that need to be met in order to be able to open a FHSA with a financial institution. Read the attached fact sheet from the Government for more detailed info or give us a call at Equity Resource.
First Home Saver Accounts
Back to News
