First Home Buyers Savings Account
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First Home Buyers Savings Account

First home saver accounts offer a tax-effective way of saving for your first home through a combination of government contributions and low taxes.

They’re a special purpose bank account that is more like a term deposit than a normal, everyday account. You have to keep the money there for a predetermined minimum period of time.

Once that time has passed and you make the decision to buy or build your first home, you have to withdraw all the money at once and close the account. You need to use the money you save as a deposit or to meet other costs you incur in buying or building your first home.

Advantages of the First Home Buyers Savings Account
There are several good reasons to open a first home saver account. The more money you save, the more the government will contribute – up to a certain limit each year, and there’s also a tax incentive to save money for your home because earnings are taxed at 15%.

Qualifying Criteria

To open one of these accounts, you need to meet eligibility conditions.

You must:

• be aged at least 18 and under 65 years

• have a tax file number you can quote in your application

• not have previously owned a home in Australia that has been your main residence

• not have previously had a first home saver account.

Not all first home saver accounts are the same. Choose the account provider you want to have your account with and read their product disclosure statement to find out more. Banks, building societies, credit unions, life-insurance companies, friendly societies and trustees of public-offer super funds can all offer first home saver accounts.

Once you have opened an account, you need to make personal contributions of at least $1,000 for each of four financial years before you can withdraw your money. Other people (such as your parents or other family members) can also help you out by contributing to your account.

The government will make a contribution equal to 17% of your personal contributions for the financial year, up to a maximum of $935 for the 2010–11 year.

To withdraw your funds, you need to have contributed at least $1,000 per year in at least four financial years and you can’t just withdraw some of your money – you must withdraw the full amount and close the account.

If you change your mind about buying a home, you cannot simply close your account, withdraw your funds and spend the money. You have to transfer the balance of your account to your superannuation (unless you are aged 60 or over in which case the balance can be transferred directly to you) and you can’t ever open another first home saver account.