First Home Buyers Deposit Saver Account

First Home Buyers Deposit Saver Account

The First Home Savers Account is a fantastic deposit saver scheme from the federal Government. First Home Saver Accounts provide a simple, tax effective way for first home buyers to save a deposit for their first home through a combination of a Government contribution and low taxes.

In summary, here is how it works. The Government will pay a contribution on up to $5,000 (indexed) of individual deposit contributions made to your first home savers account each year. You can contribute up to an overall account balance cap of $75,000 . Investment earnings (or interest) that accrue in the accounts will be taxed at 17 per cent. Withdrawals will be tax free where they are used to purchase a first home to live in.

get a Mortgage Broker to help you

If you have a savings goal or home in sight, it pays to talk to a good mortgage broker who understands both the first home saver account scheme and can help you understand what your home loan options are as well as set up your savings scheme with the right bank for you. Send us the form below or call at any time on 13 XINC (International direct line: +61 2 9249 3739) and we will have a broker in contact with you within 2 business hours.

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First Home Saver Account Eligibility

You can open an account if you:

• are aged 18 or over and under 65;
• are an Australian resident for taxation purposes;
• have not previously purchased or built a first home in Australia to live in;
• do not have or have not previously had an account; and

Contribution arrangements

There are certain contribution requirements if you are starting a first home buyer deposit saver account:

• Individual contributions will have an overall account balance cap of $75,000. These contributions may be made by the account holder or another party, such as an employer, on behalf of the account holder.
• Contributions have to be made from after-tax income.
• The Government will make an additional contribution which will be paid directly into the account, with arrangements broadly reflecting those for superannuation.
• The Government contribution will be made on up to $5,000 of individual contributions each year.
• The contribution level will be either 17 per cent, or the account holder's marginal income tax rate less 17 per cent, whichever is greater.
• Individuals with incomes of up to $80,000 who contribute $5,000 to their account will receive a Government contribution of $850.
• For individuals on incomes above $80,000, the contribution will vary depending on the marginal income tax rate of the individual.

Four-year savings horizon

To withdraw their benefits, you will have to contribute a minimum of $1,000 in each of at least four years.

Withdrawals for a first home purchase

You will be able to withdraw your account balance tax free to buy or build a first home to live in. The full amount in the account will need to be withdrawn and the account closed. Alternatively, you can close your account and contribute the full amount in the account to superannuation at any time.

Account providers

Most superannuation providers, life insurers, banks, building societies, and credit unions will be able to offer the accounts.  Talk to your bank or get help from your mortgage broker.