First Home Buyers Set to Save
Monday, 8 September 2008
The government’s first home buyers saving scheme is now taking shape, with new accounts set to be introduced by banks, super funds and other financial institutions from the start of October. The accounts will provide prospective first home buyers a significant boost to their savings via tax concessions and government contributions. For deposits of up to $5000 a year, the government will provide a 17% contribution. Earnings on the accounts will be taxed at just 15%.
With the accounts designed to encourage long term savings, first home buyers will need to make contributions of $1000 or more in four different financial years before they can withdraw their funds. An overall cap of $75,000 will apply and to be eligible account holders must be between 18 and 65.
The scheme should provide a boost to the property market in coming years, promoting renewed interest from the first home buyer segment and ensuring those who do buy have adequate deposits.
