First home saver accounts
First home saver account no more
First home saver accounts were a Federal Government initiative
to help people save for their first home. These accounts have now
been abolished but soon the first home super saver scheme will be
available to help first home buyers. Here we explain what to do if
you have an old first home saver account and how the new scheme
Changes to first home saver
The Federal Government abolished first home saver accounts
effective 1 July 2015.
Here are details of the changes the Government made:
- Accounts opened after 7:30pm Tuesday 13 May 2014 are not
entitled to a government contribution.
- Existing account holders are not eligible for a government
contribution on personal deposits made after the 2013-2014
- Tax and social security concessions ceased on 1 July 2015.
- Restrictions on withdrawals were removed on 1 July 2015.
Existing first home saver accounts have now been converted to
ordinary savings accounts. If you had a first home saver account
and are unsure what has happened to it check with your account
Features of first home saver
The main features of first home saver accounts were:
- The government made a 17% contribution on the first $6,000 you
deposited each financial year.
- The interest you earnt on your account was only taxed at a rate
- You had to save at least $1,000 each year over at least 4
financial years before you could withdraw the money. The 4 years
did not have to be consecutive.
- The maximum account balance was capped at $90,000. After your
savings reached this level, only interest and earnings could be
added to the balance.
First home super
In the Federal budget announced in May 2017, the Government
proposed a new scheme that allows first home buyers to save a home
deposit within their super fund.
Under the scheme, you'll be able to make voluntary super
contributions, within existing contribution caps, and from 1 July
2017 up to $15,000 of those voluntary contributions made in a
financial year can be withdrawn to purchase your first home. The
maximum that can be released is $30,000 in total, plus an amount
that represents deemed earnings.
Withdrawals can be made from 1 July 2018. Non-concessional
contributions and earnings can be withdrawn tax free. Concessional
contributions and earnings will be taxed at marginal tax rates with
a tax offset of 30%.
You can't take advantage of this just yet as laws still need to
be passed to make this happen. More information is available on the
Government's budget website.
First home saver accounts are no longer
available and existing account holders now have unrestricted access
to their money.
Last updated: 01 Jul 2017