First Home Saver Accounts
Effective from July 1 2015 the government has abolished the first home saver account scheme. From July 1, 2015, all first home saver accounts (FHSA) will be treated the same as any other account held with a provider.
This will affect the restrictions on your account and will allow you to withdraw and use the balance of your account however you please. If you are entitled to a government FHSA contribution from the 2014/15 income year or prior years it will still be paid. To receive these payments you must ensure that you lodge your claim before the 30th of June 2017 as claims after this date will not be honored.
Any Tax and social security concessions will also cease from 1 July 2015. Existing account holders will continue to receive all tax and social security concessions associated with these accounts until 30 June 2015. All new accounts from 7.30pm, Tuesday 13 May 2014 are not entitled to receive any concessions or government contributions. The existing rules continue to apply until 30 June 2015 and the ATO retains responsibility for ensuring compliance for actions up to this date.
What was the FHSA?
FHSAs were set up to offer several benefits to first home savers including:
- a variable interest rate;
- a tax rate of 15% (of the individual’s marginal tax rate), that is paid by the FHSA provider;
- 17% government contribution, up to a specified limit.
- Tax-free withdrawal.
- Flexibility in determining how much is contributed, up to a maximum account balance cap over the life of the FHSA
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