Introduction to First Home Saver Account

Due to the increasing recession and other financial problems, it has become quite difficult for people to invest huge amount to purchase their first home. To help such individuals, the government has taken useful steps to accomplish their dreams of owning a house of their own. The federal government has lately launched The First Home Saver Account, also known as FHSA, to help all those people who are looking for their first homes . It has even offered some aid to FHSA and the interest that gathers on this account is generally taxed at reduced rates. With this amazing tax saving account, the buyer can purchase his dream house for the first time and this is a wonderful opportunity for such people. Hence, FHSA has proved to be very helpful for first home buyers. Prime Minister Rudd launched this simple tax saving scheme in the year 2007. It gives governmental aid to encourage people to start saving for their first homes in Australia.

If you want to stay in Australia and have saved a good amount of money to buy a home for the first time to live there and also you are able to save almost $1000 annually, then you can enjoy the advantages of FHSA program. You can not withdraw till you have made a minimum contribution of $1000 yearly. You can withdraw the whole sum to purchase your first home in Australia. You can avail tax exemption by doing so. You must be more than 18 years of age or less than 65 years of age to be qualified for this scheme. Moreover, you need to submit your tax file number too. Moreover, if you want to attain FHSA program, you must never have asked for it before this. And this is for your first home in Australia. Also, you don’t have to have any other savings along with this otherwise, you have to open a fresh and your personal FHSA.

With first home save account you can save a good amount of cash. You can quickly deposit your money and you are obliged to keep the savings in your account for minimum four years. You need to maintain a balance of amount $75,000. Until you reach this amount, you must save and invest your money in your account. You get great Government contributions once your account reaches this balance. You are not let to do any partial withdrawal from this account and if you withdraw the amount, your account is stopped. The users of FHSA can enjoy tax benefits as the government will contribute 17% of every $5000 that you save as an index amount. Further, the income tax is usually charged higher than 15%, however for FHSA earnings, the tax rate is of 15% only. Moreover, you need not pass any security asset tests for this account. But, you can handle this account till you buy your home in Australia or till you become 65 years old.