This is an email question from Mandy in Vic Park, What is the First Home Saver Account? In 2008 the federal government announced the establishment of the first home saver account to assist Australians aged over 18 to save for their first home.
To be eligible for the first home saver account you must be aged between 18 and 65, have not previously purchased or built a first home to live in, do not have or have not previously had a First Home Saver Account and you must provide your tax file number.
Contributions can be made by the account holder, or other parties, such as your employer. Contributions will be made from after tax income. The government will make additional contributions directly to the account after you lodge your tax return, and the provider (the financial institution) has submitted the relevant information to the ATO (Australian Tax Office).
The government will contribute 17 per cent on the first $5,000 (indexed) of individual contributions made each year. This means if you save $5,000 that year in the First Home Saver Account, the government will contribute $850. The First Home Saver Account limit is $75,000 (indexed).
To withdraw the funds, a minimum of $1,000 contribution to the first home saver account, must be made over four separate financial years. You will need to live in the home for at least 6 months, within the first 12 months of purchase or completion of construction of your first home.
This is a great initiative from the government. There is more information available from the First Home Saver Accounts Website, click the link to get more information, as the rules and regulations may change at anytime. The web link – http://www.homesaver.treasury.gov.au/
If you have any questions about the First Home Saver Account, comment below, ro contact me anytime, to discuss you needs.
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