First Home Saver Account Scheme (FHSA)
The First Home Saver Account Scheme (FHSA) is a fantastic new initiative from the Australian federal government that aims to help aspiring first home buyers save a larger deposit faster. The First Home Saver Account will work in a similar style to superannuation schemes by offering tax breaks and higher returns.
A First Home Saver Account will differ from an ordinary savings account in the following ways:
- First Home Savers will be eligible for a low tax rate of 17 per cent on the first $5000 of income they deposit in their account each year – rather than the ordinary tax rate (the individual’s relevant income tax rate).
- Interest earned will be taxed at 17 per cent or less.
First Home Saver Account Scheme Overview and Assistance
If you would like an overview or help with setting up your First Home Saver Account Scheme, or to talk to a mortgage broker about home loan options that are in your best interest, call us on 13 LOAN (or +61 2 9249 3739 for international callers) or email us the form on this page and we will return your contact within 2 business hours.
Individual Contributions
Individual contributions may be made by the account holder or another party, such as an employer, on behalf of the account holder. Be aware that contributions have to be made from after-tax income.
Government Contributions
The Government will make an additional contribution which will be paid directly into the account, with arrangements broadly reflecting those for superannuation.
- The Government contribution will contribute 17 per cent on the first $5000 (indexed) of individual contributions made each year.
- Therefore individuals contributing $5000 will recieve a government contribution of $850.
- No minimum annual deposit is needed to keep the account open. The first home saver account can remain open for as long as necessary or until the account holder turns 65, at which time it must be closed.
Although it typically takes first home buyers an average of five years to save an adequate home deposit, the First Home Saver Accounts allow for savings to be withdrawn after four years to provide a reasonable degree of flexibility in the ever-changing property market.
Withdrawals from First Home Saver Accounts will only be permitted for the purchase of an eligible first home and will be tax-free.
Am I Eligible For a First Home Saver Account?
An individual can open a First Home Saver Account if they:
- are aged 18 or over and under 65;
- are an Australian resident for taxation purposes;
- have not previously purchased or built a first home in Australia to live in;
- do not have or have not previously had an account; and
- make an initial contribution of at least $1,000.
One of the greatest obstacles to buying a first home is saving a deposit; the First Home Saver Account Scheme overcomes this and brings you much closer to your dream – owning your own home.
More information and home loan help
For more information on how and where to find a better home loan deal from an extensive panel of Australian banks and secure mortgage lenders, or to speak to your local area mortgage expert, contact us on 13 LOAN (direct +61 2 9249 3739)
