First Home Saver Account – an update
The Government has made amendments to the original proposal of the First Home Saver Accounts, which are due to be available in October 2008. A summary of the Bill which has now received Royal Assent is outlined below.
- There is no limit to the amount that can be put in each year (after tax), but the government will contribute 15% up to a maximum of $5,000 (maximum contribution of $850 per annum)
- There is an account balance limit of $75,000
- The account must be held for at least four years, with at least $1,000 needing to be contributed in the four years preceding withdrawing the funds
- The funds can only be used to purchase a home, and if not used for this purpose, can only be transferred to superannuation
- Earnings on the funds will be taxed at 15%
In order to open an account, the account holder must be at least 18 years old and have never built or purchased a home in Australia.
Tags: FHSA, home saver, savings