First Home Saver Accounts
Everything you need to know about the First Home Saver Account
| Now even the Australian Government is trying to make it simpler to buy your first home, with their launch of the First Home Saver Account in October 2008. |
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Currently 19 financial institutions plan to offer the account, including ANZ, the Commonwealth Bank, AMP Banking and various online credit unions, which is great news for people saving for their first home. Your Mortgage Choice broker can evaluate your current situation so you can make an informed decision about whether you will benefit from a FHS account.
What does the First Home Saver Account involve? It’s simple really.
If you meet the eligibility and savings criteria, the Government will not only tax your savings at a lower rate, but they will contribute to them.
So what do you need to do?
You need to:
- be a first home buyer aged between 18 and 65
- open a special First Home Saver Account (there is no minimum deposit required)
- shop around for your FHSA because some institutions are paying higher interest rates than others
- make personal after tax contributions of at least $1,000 a year over four financial years (that’s 1st July to 30th June) to be able to withdraw your savings tax-free and buy or build your first home.
- provide your Tax File Number to the account provider
What do you get?
- You can save up to $75,000
- Your savings will only be taxed at 15% instead of the usual marginal tax rate
- The tax will be paid by the account provider, not you.
- The Government will contribute 17% on the first $5,000 of the contributions you make each year. So if you save $5,000 in a year you will receive a Government contribution of $850.
- Withdrawals will be tax-free where they are used to purchase or build a first home to live in.
- If your mind or your circumstances change and you decide not to buy, you can transfer your funds to your superannuation fund.
- Your can still claim the First Home Buyer’s Grant
You can find out more at the Australian Government’s First Home Saver Account site.
Remember, you need to save over at least four years to be eligible to withdraw your savings tax-free so don’t delay. Talk to your Mortgage Choice broker or financial institution today.
| Institution |
Rate % |
| AMP Banking |
3 |
| ANZ |
3.75 |
| Commonwealth Bank |
3.5 |
| Hunter United Credit Union |
3 |
| NSW Teachers Credit Union |
3.19 |
| MyState Financial |
3.25 |
| Big Sky Credit Union |
3.05 |