First Home Saver Account Guide for First Home Owners

First home saver accounts are designed to assist Australians 18 years and older to save for their first home. The accounts are offered by a range of banks and credit unions. The first home saver account is a government initiative designed to compliment the existing First Home Owners Grant scheme.

Features of First Home Saver Accounts:

The Australian Government contributes 17 per cent on the first $5,000 (indexed) of individual contributions made every year. For example, if you contribute $5,000, the government will contribute $850.
A minimum of $1,000 per year over four separate financial years must be deposited before funds can be withdrawn for the purpose of buying a property
Interest earned is taxed at the low rate of 15 per cent
Withdrawals from the account are tax free when they are used to purchase a first home to live in
No minimum annual deposit is required to keep the account open
First Home Saver accounts can remain open until you are 65 at which point they must be closed
Withdrawals are not allowed from the account except for the purpose of buying a first home. Funds withdrawn that are not put towards a first home are deposited into your Super fund and cannot be accessed until you are 65.
Make personal contributions of at least $1,000 for each of four financial years (not necessarily consecutive years) before you can withdraw your money.
An account balance cap of $75,000 exists (indexed annually), after which interest is still paid to increase the balance but further contributions by the account holder are not accepted

First Home Saver Account Restrictions

A ray of sunlight has recently beamed over the First Home Saver Account horizon, courtesy of Wayne Swan, the federal treasurer. In the May 2010 Budget, he announced amendments to some of the restrictions on the account. Borrowers who open a FHSA but purchase a property within the first four years will now have their funds credited to their home loan account tax free rather than their super at the end of the four year minimum period. Savings will still be credited to the account holders superannuation account should a property not be purchased for owner-occupation, such as an investment property. The changes announced in the federal budget are yet to be legislated.

Compare First Home Saver Accounts

If you are considering opening a FHSA, it pays to do your research beforehand. There are currently 19 institutions in Australia offering FHSAs and their offerings will vary. The main differential is the interest which they apply to the account above the government contribution. At the time of writing the range of interest was 0-5%, which can equate to a difference of $1250 worth of interest earnings on a $25,000 deposit.

Institutions currently offering first home saver accounts:

AMP Banking
ANZ
Big Sky Credit Union
Commonwealth Bank
Credit Union SA
Defence Force Credit Union
Hume Building Society
Hunter United Credit Un
IMB
ME Bank
MyState Financial
Plenty Credit Co-operative
Police Credit
Police Credit Union NSW
Railways Credit Union
Teachers Credit Union
Victoria Teachers Credit Union
Wagga Mutual Credit Union
Wyong Council Credit Union

First Home Buyer? Compare Home Loans

CANSTAR CANNEX Star Ratings are a great way for first home buyers to compare mortgages across Australia. Take a look at the current Star Ratings for home loans.

First Home Buyer Budget Calculator

If you're a potential first home owner, and if you're starting to save for that first home, you need to make a budget. That's where our first home buyer budget worksheet can help. Simply download the PDF, print, and use it to work out how much you need to save in order to save up for that home loan deposit.