First Home Saver Accounts
On 4 February 2008, the Government confirmed its 2007 federal election commitment to establish First Home Saver Accounts to assist Australians aged 18 and over to save for their first home.
First Home Saver Accounts are the first of their kind in Australia and will provide a simple, tax effective way for Australians to save for their first home through a combination of Government contributions and low taxes.
On 8 February 2008, a consultation paper was released outlining the proposed features of the accounts and how they would operate. The Government undertook an extensive consultation process and sought comments from the community and industry on the details of the accounts by 7 March 2008. The Government received over 150 submissions from individuals, businesses and organisations.
In response to the issues and suggestions raised during the consultation period, the Government has made a number of changes to improve the design features of the accounts.
Some of the key changes are:
the Government will contribute 17 per cent on the first $5,000 (indexed) of individual contributions made each year;
an overall account balance cap of $75,000 has been introduced; and
the upfront contribution of $1,000 has been removed.
The Government has maintained the taxation incentives.
Investment earnings (or interest) that accrue in the accounts will be taxed at 15 per cent.
Withdrawals will be tax free where they are used to purchase a first home to live in.
The Government expects to introduce the legislation supporting the accounts by 1 July 2008. First Home Saver Accounts will be available from 1 October 2008.
Further details on the key features on the accounts are contained in the First Home Saver Account Fact Sheets.
http://www.homesaver.treasury.gov.au/content/default.asp
Cheers
Viphar
On 4 February 2008, the Government confirmed its 2007 federal election commitment to establish First Home Saver Accounts to assist Australians aged 18 and over to save for their first home.
First Home Saver Accounts are the first of their kind in Australia and will provide a simple, tax effective way for Australians to save for their first home through a combination of Government contributions and low taxes.
On 8 February 2008, a consultation paper was released outlining the proposed features of the accounts and how they would operate. The Government undertook an extensive consultation process and sought comments from the community and industry on the details of the accounts by 7 March 2008. The Government received over 150 submissions from individuals, businesses and organisations.
In response to the issues and suggestions raised during the consultation period, the Government has made a number of changes to improve the design features of the accounts.
Some of the key changes are:
the Government will contribute 17 per cent on the first $5,000 (indexed) of individual contributions made each year;
an overall account balance cap of $75,000 has been introduced; and
the upfront contribution of $1,000 has been removed.
The Government has maintained the taxation incentives.
Investment earnings (or interest) that accrue in the accounts will be taxed at 15 per cent.
Withdrawals will be tax free where they are used to purchase a first home to live in.
The Government expects to introduce the legislation supporting the accounts by 1 July 2008. First Home Saver Accounts will be available from 1 October 2008.
Further details on the key features on the accounts are contained in the First Home Saver Account Fact Sheets.
http://www.homesaver.treasury.gov.au/content/default.asp
Cheers
Viphar
