On 4 February 2008, the Government confirmed its 2007 Federal election commitment to establish First Home Saver Accounts to assist Australians aged 18 and over to save for their first home.
As of October 1st 2008 the First Home Saver Accounts are now available. The intent is to provide a simple, tax effective way for Australians to save for their first home through a combination of Government contributions and lower taxes.
Some of the key Features are:
- The Government will contribute 17 per cent on the first $5,000 of individual contributions made each year (that is around $850 for every $5,000);
- The Government will make additional contributions which will be paid directly into the account, paid after the individual has lodged their tax return.
- Any interest that accrues in the account will be taxed at 15 per cent.
- Withdrawals will be tax free where they are used to purchase a First Home to live in.
One negative of the account is the account must be open & Contributions of at least $1,000 must be made for at least 4 years before funds can be withdrawn to purchase a home.
There are provisions to have the account closed early
Further details on the key features on the accounts are contained in the following links
On 14th October 2008 the Commonwealth Government announced that they are increasing the First Home Owners Grant (or FHOG)
They are calling it the First Home Owner Boost and it is for contracts made between 14th October 2008 & 30 June 2009, there are 2 components to the Boost program.
- First home buyers who purchase established homes will receive a boost of $7,000 that will double the grant to $14,000
- First home buyers who build a new home or purchase a newly constructed home will receive an extra $14,000 to take their grant to $21,000.
There is a specific Fact sheet relating to the Boost Click here for the Fact Sheet
In general the NSW Office of State Revenue has some good information and some very helpful calculators to work out what you will be saving. Follow this link http://www.osr.nsw.gov.au/benefits/first_home/
You should call and make an appointment for one of our Friendly consultants to some and help you thought the process. You are not alone.
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