First Home Saver Account

First Home Saver Account is getting increasingly popular, thanks to the services extended by them to people who intend to buy their first home. You are lucky if you hold such an account because it means you would have to pay a reduced tax rate on your income and other earnings. With the aid of your First Home Saver Account, you are saved from paying heavy taxes and the funds saved in this account can be used fruitfully when you want to buy your home. These funds come in handy not only at the time of buying your home but also for other purposes also. The only requisite in First home saver account is that you cannot utilize the money for the initial four years and only after the completion of these four years, you could use it either for buying a home or building a house.

17% of your income or saving gets transferred to the Government account every financial year. The only requisite is that you need to have either an investment or a saving of $ 5000 or above. If this amount is present in your account, the Government adds Eight hundred and fifty dollars more to this account annually. You also get to earn interest on your investment and earnings. The rate of tax charged is lower that means you would be charged only 15% tax which means you would be saving on tax as well.

An amount of 17% of your saving or investment will be added by the Government to your First Home Saver Account in each financial year. However, the amount of your saving or investment must be up to $5000 or more than that. If you have a saving of $5000 in your account Government will add $850 to top up your saving each financial year. Another excellent feature offered by the First Home Save Account is that they offer interest on your earnings and investment. The tax rate will be quite low on your interest or earnings. The tax rate applied by the Government will be only 15%.

The Government checks out for views, explanations and comments from individuals regarding the first home saver account before its introduction. There were about 150 submissions from various parties which included business community, organizations, individuals who were keen on this plan. The interested individuals were also extended tax incentives.

Banks, Life insurance firms, credit unions are some organizations with which you could start the FHSA account. The above mentioned organizations are governed by APRA. The accounts can be transferred on payment of some minimal charges.

The First Home Saver Account was established in the year 2008 on 1st October and has been successful since then. Treat it like any other financial product and do your enquiries before you are completely convinced about it. Read the terms and conditions of the account and just like any other account, nominal charges and fees are charged. The rates of interest need also to be given thought of.