First Home Saver Accounts Start Today

Would-be-first-home-buyers across Australia will be able to take advantage of the Federal Government's first home saver accounts from today.

The accounts will be offered by major financial institutions across the country, including ANZ, Commonwealth Bank, AMP, Members Equity and several credit unions.

Here are some key facts

Key facts

• No minimum deposit required to open account
  
• Limit of $75,000 on overall account balance
  
• Flat Government contribution of 17% paid on first $5,000 of individual contributions made each year (you could get max $850 a year for free)
  
• Government contributions are tax free
  
• Interest earned taxed at 15% (the provider is responsible to pay so they will work out the effective interest for you)
  
• Can still claim the First Home Buyers Grant in addition
  
• Available through public-offer superannuation providers, life insurers, friendly societies, banks, building societies and credit unions

Potential drawbacks

• You must contribute at least $1,000 in at least four separate financial years before you can withdraw your funds
  
• You must use your fund to purchase or build a new home. The only alternative is to switch the entire amount into your superannuation fund
  
• You must live in the home for at least 6 months within the first 12 months of purchase or completion of construction

To find out more about the FHSA, you can also visit the Government’s website.