First Home Savers Accounts
By Sandy Naidu | July 1, 2008
Another initiative announced in the Federal Budget 2008 is the ‘First Home Savers Accounts’. This initiative will help a lot of families who are struggling to save up for the deposit needed for their first home. ‘First Home Savers Account’ provides its account holders a tax effective way of saving for their first home.
Who Is Eligible
* Anyone between 18 and 65 who have not previously purchased or built a first home to live in.
* Only for Australian Residents.
Features Of The Account
* The Government will contribute 17% of the first $5,000 contributed annually by the account holders. This $5000 is indexed - so this means it is adjusted to inflation. So it will be less than $5000 next year and less than that the following year…
 |
* Once the account reaches $75,000, Government will stop contributing to the account. * Any investment earnings (like interest) will only be charged 15%. * Your account balance will not be included in any income and means test (income and means test that is used for other Government payments like Family Tax Benefit etc) |
* When you withdraw the amount from the account for purchasing your first home, the withdrawal amount will be tax free (provided you have contributed atleast $1000 in each of the last four years - this means to get the withdrawal tax concession, you have to keep the account open for atleast 4 years)..
Words Of Caution
* This money has to be used only to purchase your first home - and the home has to be the one you will be living in at least for the first 6 months of purchase.
* Only the people who meet the eligibility criteria can open this account - otherwise the Government has warned that huge penalties apply.
* If for any reason you don’t wish to use the money for your home any more then the entire money will be transferred to your superannuation fund. You will have no access to the account.
This seems to be an excellent investment option for all the families who are yet to purchase their first home. If you are one of those families, open the account and make use of the contributions and tax concessions. My understanding is that all Banks, Credit Unions and building societies offer these types of deposit accounts. Since they are just deposit accounts the interest rate might not be very high…However apparently life insurers and friendly societies can offer some investment linked accounts…So shop around and check the rates before you open this account.
Related Posts:
- How To Save Deposit For Your First Home
Buying your first home is becoming more and more difficult. The Housing Industry Association's affordability index, fell by 6 per cent in June quarter... - Christmas Club Accounts
Lot of credit unions offer Christmas Club Accouts. If you struggle to pay off the credit card bills after the festive season then these... - Federal Budget - Family Tax Benefit Part B
Family Tax Benefit Part B is paid to single parent families or to two parent families where only partner has the main income (the... - The Low Down On The Low Doc Home Loans
The traditional home loans can be an absolute nightmare for the self-employed. The lenders expect the self-employed to submit more paperwork than the others...
Topics: Property |
Comments
« Get Your Teenagers’ Teeth Checked | Home | Online Resources For Your Property Search »
