First Home Saver Account scheme to be made more flexible in budget changes announced tonight by Treasurer Wayne Swan.
Rules governing First Home Saver Account will be changed to make them more flexible, addressing a key concern young Australians have had in taking up the savings accounts to date.
Currently a First Home Saver Account must be held for a minimum 4 year period before accessing the funds to buy a first home (see other First Home Saver Account rules). If a first home is purchased before meeting the 4 year rule, the First Home Saver Account must be closed and the balance transferred to a superannuation fund. Many potential account holders saw this as too restrictive.
Under changes announced in the 2010 budget an account holder will be able to purchase their first home any time. The 4 year qualifying period to release the funds will remain, however the First Home Saver Account will be able to be paid into an approved mortgage at the end of this period. The rule change is designed to allow first home savers to be better able to make purchasing decisions appropriate to their changing circumstances.
First Home Saver Accounts provide tax concessions and bonus contributions from the Government to assist aspiring first home buyers realise their home ownership goals.
“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.
The government will consult on the proposed changes in the coming months.
What do you think?
Have your say on the Government's First Home Saver Account proposals
