First home saver accounts

Written on the 8th of October 2008 by Accounting Brilliance Director Johan Fourie

First Home Saver Accounts - where the Federal Government is going to help you save for your first home, save on TAX and still qualify for the First Home Owners Grant - how good is that!

What is a First Home Saver Account?

A First Home Saver Account is a savings account designed to offer you a simple, tax-effective way of saving for your first home through a combination of government contributions and low taxes. Using a first home saver account means that from 1 October 2008, the government is going to help you save for a home.
 
The first home saver account is different from a normal account.

First Home Saver Accounts are designed to help you buy your first home. It’s a special purpose account that’s more like a term deposit than a normal, everyday account, because you have to keep the money there for a minimum period of time. Once that time has passed and you make the decision to buy your home, you have to withdraw all the money at once and close the account. The advantages of a first home saver account over a normal account are that government contributions add to your savings, and withdrawals are tax-free. Earnings on first home saver accounts are taxed at 15% but this must be paid by the account provider. You can also make personal contributions at any time – for example, from your pay, a tax refund or an inheritance.
 
The First Home Saver Account does not replace the First Home Owner Grant

The First Home Saver Account does not replace the First Home Owner Grant. If you meet all the conditions, you may be eligible for both; however, you have to use a separate applications process for each
 
Want to know more about this?

Send me an email at johanf@accoutingbrilliance.com.au or give me a call on 07 5593 1000 and i'll be happy to assist you with more information. And please feel free to pass this information onto anyone who may benefit from this new initiative.
 

This article was supplied by Accounting Brilliance Director Johan Fourie. For more information on Accounting Brilliance click on Gold Coast Bookkeeper.