First Home Saving Account
Earlier this year the Federal Government announced a new scheme to offer assistance to people wishing to save funds to buy a property.
The scheme began on 1 October 2008, and the account can be opened with most major banks. The scheme requires each individual saver to deposit at least $1000 per year, for a minimum of four years. The government will then contribute 17 cents for every dollar saved. A single first-home buyer who saves $5000 a year will be eligible to collect a maximum of $850 a year, and couples who save $10,000 a year eligible for a $1700-a-year top-up.
Often, saving for a deposit for a first home can be a major hurdle for many potential home buyers. This scheme is designed to help young Australians and first home buyers to save money over a period of four years.
No minimum annual deposit is needed to keep the account open, and the account can remain open for as long as necessary or until the account holder turns 65, at which time it must be closed. Tax benefits apply also, contributions will not be subject to tax when contributed to an account, investment earnings (or interest) will be taxed at a rate of 15 per cent, and withdrawals will be tax free.
Should you no longer wish to purchase a first home, you will not be able to access the account but can transfer the balance into superannuation and close the account.
First-home buyers must live in the house for at least six months after claiming their money and can still claim the First Home Owners Grant as well.
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