The government First Home Saver Accounts began in October 2008, as a special way of saving towards buying your first home, and to get a government contribution towards it, based on the amount you have saved.
The government contribution consists of 17% being added to your savings for the year, up to a maximum of $5,000 of savings in a financial year.
- $4,000 in savings will result in a government contribution of $680 (17% of $4,000)
- $5,000 in savings will result in a government contribution of $850 (17% of $5,000)
- $6,000 in savings will result in a government contribution of $850 (17% of the $5,000 maximum)
You must be at least 18 years old not more than 65, and have never owned a home in Australia in which you have lived.
You must save for at least 4 years, and the withdrawal MUST be used for a home purchase
You can keep your account open until you buy your first home, or turn 65.
The Four Year Withdrawal Rule
To withdraw your savings you must have saved at least $1,000 in each of 4 or more financial years. These years need not be consecutive.
Interest and Tax
Interest paid by the bank will be taxed at source at only 15%, and will not need to be included in your annual tax return.
Various Banks and Financial Institutions will be able to provide first home saver accounts.
Two First Home Saver Accounts can be used in the purchase of a house, satisfying the requirements for two individual account holders, joining together for the purchase, but only one account can be held per person.