First Home Saver Accounts
The Federal Government has instituted a new savings plan for First Home Buyers. The idea is to assist Australians to boost their savings for a deposit on their first home.
In order to be eligible for the tax-free withdrawal for a first home, the owner of the account must have put in a minimum amount of $1000 per calendar year for four financial years.
However, the contributor can be anyone. All contributions must be from after-tax income and a tax deduction cannot be claimed.
The Government will make a flat 17% contribution on the first $5000 of savings to the First Home Saver account in any year.
Investment earnings (or interest) that accrue in the account will be taxed at a maximum of 15% as well. But all Government contributions will be tax-free.
Withdrawals from a First Home Saver account which are used to purchase or build a first home will be tax free. The First Home Saver account has a $75,000 balance cap, after which no further personal contributions can be made.
The Scheme will commence from 1 October 2008.
To open a First Home Saver account you will need to:
• Be aged 18 to 65
• Have not previously purchased or built a first home in Australia to live in
• Not currently have or previously have had a First Home Saver Account
• Provide a tax fi le number.
If you have a real estate question or need, feel free to phone me, Noel Thompson, Principal
Professionals Logan Lifestyles, on 0418 517 525, or to call into our friendly offices at
Browns Plains & Waterford for immediate assistance.