First Home Saver Accounts

Parliament has passed legislation for implementing First Home Saver Accounts. These are designed to help Australians save a deposit for their first home. To qualify for this account you must be between 18 and 65 and must never have owned a dwelling in Australia or Norfolk Island that was your main residence.

Key points:

• For the first $5,000 that the account holder contributes to the account each financial year, the government generally contributes 17% of that amount.
• There is an account balance cap of $75,000 for the 2008-09 financial year. This is indexed over the life of the account.
• Account holders must contribute at least $1,000 over four separate financial years before they can withdraw money from the account to purchase or build their first home. Withdrawals are tax-free.
• Account providers can legally offer First Home Saver Accounts from 1 October 2008. They are taxed at 15% for earnings on the account.

See the ATO website for an Overview of First Home Saver Accounts.