Young Australians are struggling to buy their first home with affordability at all time lows. The Government’s decision to introduce First Home Saver Accounts is a great initiative to help people build a bigger deposit for their first home than traditional savings accounts.

First Home Saver Accounts will attract bonus money from the Government and benefit from low tax rates, so for example a couple each earning average incomes and putting aside 10 per cent of their money into a First Home Saver Account, could save a deposit of more than $88,500 after five years of disciplined savings. This is up to $12,600 more than they would have saved otherwise.

First Home Saver accounts are a new type of investment account designed to help Australians boost their savings for a deposit on their first home. This Government initiative will see super funds and banks being able to offer a superannuation style investment account that helps maximise savings through tax breaks and Government contributions.

First Home Saver accounts will be concessionally taxed (like for superannuation), meaning that generally much lower tax will be paid on the investment or interest earnings of First Home Saver accounts, than for regular savings accounts or managed investments.