I was reading about these in in the smh a few days ago and think that it is a great idea to help people get into their first home. If you’re saving to buy or build your first home then a first home saver account may suit you. You could take advantage of a government contribution to your savings and a lower rate of tax on your interest or earning
What is the First Home Saver Account?
A first home saver account is a special way of saving to buy or build your first home in which your savings attract a government contribution. First home saver accounts became available from 1 October 2008. Unlike an ordinary savings account or investment, you can only use the funds in this type of account to buy or build a home that you will live in, and only after you have saved for at least 4 financial years.
Main features of first home saver accounts
• Your savings are matched by a 17% government contribution on amounts up to $5,000 in a financial year. For example, if you contribute $5,000 this financial year, the government will top up your savings with $850.
• Low (15%) tax on interest or earnings
• Interest or earnings on your savings from your financial institution.
Check out the ATO website and the ASIC FIDO website (Australian Securities and Invesments Commission – Financial Tips and Saftey Checks) to check out eligibility, conditions and if the first home saver account is right for your situation.
I think that this is a great initiative and if you meet the eligibility criteria and can fit within the rules I think that this is definitely worth a look.
(Please note – The purpose of this blog post is for information purposes only. This is not financial advise and you will need to get independent advise based on your unique circumstances to see if this scheme is suitable for your own situation. Also you will need to read the product disclosure statements of any product to ensure that they meet your unique needs.)