Concerns from first home buyers about the First Home Saver Account scheme have been answered in the recent release of 2010 budget. Treasurer Wayne Swan has announced an introduction of greater flexibility in the scheme which has been the primary reason for first home buyers not investing their time and money into the account.
Currently, if a first home buyer purchases a property before the end of the four year minimum investment period, the account has to be closed and the balance is transferred to the buyer’s superannuation fund. This was seen by many first home buyers as restrictive and the major deterrent for not opening such a high interest savings account.
However, changes announced in the budget propose that a first home buyer can purchase a property any time while holding the account. If it happens to be before the minimum four years, the account will no longer be closed but held open till the end of the qualifying period. At the end, they will be released into paying off an approved home loan.
Concessions will remain the same – the Government contributes 17 per cent on the first $5,000 (indexed) of individual contributions made each year. This means that if you contribute $5,000, you will receive a Government contribution of $850 to the account. Account owners also have the added bonus of a low tax concession 15% on interest earned.
This is great for first home buyers as it allows them to make purchasing decisions appropriate their situation and at the same time, they are still able to take advantage of the tax concessions and government co-contributions.
“We are improving the First Home Saver Accounts to help address the housing affordability challenge faced by so many young Australians” said the Treasurer in his 2010 budget speech.
If you want to find out more about the first home savers account, head to the First Home Savers website.
Source: http://www.firsthomesaver.com.au/
Tags: affordability, Budget, First Home Buyers, First Home Savers Account, Home Loan, Home Loans, Mortgage, Property, Variable loan, variable rate