2010 Budget Changes - Have Your Say!

Mike	\| \| 2010-05-12 20:35:32

The four years things was a big problem with this scheme, so yes I think this change helps quite a bit

Tim	\| \| 2010-05-18 21:13:56

It's a step in the right direction but there should be no time restriction as to when the funds can be used for purchase.

Jdawg

| | 2010-05-28 20:19:05

if you consider what you have just said anyone could open an account 30 june - deposit $5,000 then on 2 july withdraw the $5,850 (i.e. $5,000 + 17% government contribution). The account should have at least a 1 year time restriction.

TJ	\| \| 2010-06-09 23:18:00

I opened a FHSA sometime ago but haven't deposited any money into it because of the restrictions. I'm expecting to purchase a property in the next 18-24 months, so waiting for 4 financial years to access my deposit isn't an option.

I don't see why the government shouldn't allow access to the money at any time to purchase your first home.

The $850 (if you deposit at least $5000) is only deposited into the account after you're tax return has been processed. While you could do what Jdawg suggest, I doubt there are many first home buyers that would deposit funds on the 30th, lodge their tax returns to get the co-contribution and then settle on a property within a month and withdraw the money. Even if they did who really cares? The scheme has been budgeted for and if they're purchasing a house they must be working and paying taxes (and probably will be for the next 30 years).

There's also the situation where you make deposits into the account and purchase a property before the end ...

TJ	\| \| 2010-06-09 23:20:59

of the first financial year. In that case you wouldn't get a co-contribution only the tax discount on the interest for the months the account was open.

The only way these changes will be of any use is if all banks offered FHSA and you could transfer the FHSA to the bank that will hold your mortgage. The bank could then consider it to be part of your deposit or security and offset your mortgage against the value in the FHSA until the 4 yrs are up and the money can be transferred to the mortgage.

Ana	\| \| 2010-07-30 10:53:16

Joe - Good move

| | 2010-06-08 08:24:33

It will be good so that many more can open the a/c to get the saving rhythm going and can also buy a place when they find the place they want to live.Joe

Andrew - Can't be used towards your de

| | 2010-07-16 13:57:33

It appears that, if you buy a home before 4 years, you still need the hold the FHSA for 4 years, and then be able to transfer the funds into the mortgage.

Hence, you won't be able to access the funds for your deposit.....which goes against the spirit of the FHSA policy.

People need to understand this. I don't see many people seeing this change as a huge incentive to open a FHSA account

steve - When does this come into effec

| | 2010-05-13 10:29:54

I was a dill who didnt read the fine print about the 4 years in the first place.

If i buy a house before June 30 (which i am about to do) will my cash roll into super or can i put it on my mortgage once the 4 years has past?

I've tried to call everyone but no one can tell me. Wayne Swan probably can't either!

shaun - Mr

| | 2010-05-13 15:38:13

my guess will be that if this does pass through parliment then it could be back dated from 11 may 2009 or could be 1 July 2009 or some other date. But i also think that if you keep holding the account (I am unsure what happens to the account once you buy a home, i imagine you have full control over the funds anyway and that just becauase you buy a house the funds won't magically disapper), if this is the case keep holding the account until this is ratified and then you should be able to transfer to your mortgage.

shaun

| | 2010-05-13 15:39:03

correction with the dates, meant to be 2010

shaun

| | 2010-05-13 16:08:52

quote from press release on treasury website "The changes will apply for houses purchased after Royal Assent of the legislation giving effect to this change."

so what i said above may not be possible

Admin

| | 2010-05-13 19:58:27

The proposal announced in the Budget is yet to be passed into law, and is still subject to consultation once draft ammendments to the relevant legislation are made available in the coming months.

The Treasurer has been specific about the Government's intentions as to when the change will come into effect:

"The changes will apply for houses purchased after Royal Assent of the legislation giving effect to this change."

Given the current status of the proposal it seems unlikely that any FHSA account holders will be able to 'buy early' and later use their FHSA on a mortgage for at least some months - until it becomes law.

(Read the Treasurer's press release via the link in our Budget article on the home page).

Charles - good and bad

| | 2010-05-13 22:14:38

The new change does give people much more flexibility, unfortunately when the FHSA is introduced two years ago. The plan comes together with the First Home Buyers Boost, which eventually driven most house prices in big cities by double digits. So those that joined this scheme in previous years will found themselves like idiots.

I wonder if the government indeed wants to help the first home buyers or the existing home owners...

Kirra - happy!

| | 2010-05-14 12:25:34

I think that's great! because I have a home saver account, have purchased my first home, and the bank and superannuation fund i have aren't able to transfer the money? what the?

eleanor - makes sense

| | 2010-05-14 12:31:42

Amanda

| | 2010-05-14 12:36:50

Yes, this is a great idea.

I have a First Home Saver Account and I was always put off by the thought that should I choose not to buy a house, or if I bought one early, my hard earned cash would go into my superannuation. (Where I have almost no control over it!)

I will be crossing my fingers this change gets passed in legislation.

matt - hax?

| | 2010-05-14 14:10:25

I was wondering if you would be able to use this change in your favour. like, say you buy your house and still have the account open, then in the first year of your mortgage, it would be better to put any extra money you get into your FHSA, which pays 20% as opposed to putting it against your mortgage, which would only save you like 7, 8 or 9%.

presumably you would be forced to close the account after the 4 years was up if you had bought a property... but still...
any thoughts?

Bec	\| \| 2010-05-14 16:28:06

Great strategy if you're a rich kid and daddy's gonna stump up the deposit!

Nic	\| \| 2010-05-15 11:20:52

Honestly, if coughing up the deposit is difficult, do you think paying off the mortgage is easier?

Nic - Dr

| | 2010-05-15 11:19:24

Good point, but it would be less than 20%. You would get 17% minus about 3%* for the $5000 you put in the current year.

The money you put in earlier on would be losing you about 3% p.a.*.

So assuming you put in $5000 every year, in the fourth year, you would get an approximate 14% - 3 X 3%= 5%. BUT you would do better in the earlier years.

However, if the difference* is about 4% as opposed to 3%, you more or less break even in the fourth year (lose about 1%). If it is 5%, then you lose in the fourth year about 3%.

Generally, you stand to gain if the difference* is less than about 5%, but it depends on how much longer you have to go and how much already you got in the FHSA.

Which is why I think they should make it more flexible on when it can be used, unless the government wants to please the banks for political reasons.

* The difference in mortgage interest rate and deposit interest rate after tax all of which varies is:

deposit % - tax % - mortgage %

This is currently about 3...

Nic - Dr

| | 2010-05-15 11:31:46

Sorry wrong calculation. The 14% only applies to the $5000 deposited in the current year, so it is diluted out.

In the 4th year (assuming $5000 p.a. deposited), it would be easier to calculate as 17%/4 - 3%* = 4.25% - 3% = 1.25%. (If in 3rd year you would have 17%/3 -3%, i.e. less dilution.)

So in the 4th year, still break even at 4% difference (slightly better off), and lose out if 5% difference.

*3% is difference if you get a reasonably good deal at the moment.

Clare

| | 2010-05-14 15:41:40

This change means nothing if you still can't use the money for a home deposit within the 4 years.

Rach - FHSA fan

| | 2010-05-15 10:35:02

I opened a first home saver account last month. As of 2 July 2012, I can withdraw the money - yes, that's right after 2 years. That's because the fhsa works on financial years. For me it was a no brainer. I'm currently paying 38% tax on the interest earned on my savings (vs 15% for the fhsa). Plus, I get the extra 17% from the govt each year. I wish I had been in a position to take advantage of the extra Fed + state govt grants, but I wasn't, I've only just started a new job paying much better. This way, I get a minimum of 4 x $850, which is 1/2 the extra $7k. I actually think the 4 year (or rather, 2 1/4 years for me) is a good thing - instead of rushing in whenever I see a place I like, I'm having to really assess the value of each place and am getting a much better idea of what constitutes value. I do think it is an improvement that the money doesn't have to go to your super if you buy a place before the 4 (or 2) years is up.

John	\| \| 2010-05-16 14:56:48

Can you clarify the 2 year period you mentioned?
By my calculations if an account is opened before June 31 this year the funds will not be available until 2nd July 2013 (4 years of deposits required: 09/10, 10/11, 11/12 and 12/13).

Also, the wording of it suggests that you would have to wait the full final year, rather than for instance depositing $5000 on July 01 2013 and withdrawing the full balance of the account the next day. That would make minimum date for withdrawal July 01 2014. Fact sheet also says that government co-contribution is added at end of financial year which supports this.

John	\| \| 2010-05-16 15:32:31

Sorry, got dates slightly mixed up in earlier post(cannot edit).

To clarify I interpret the earliest time to withdraw funds as July 2013 as the government co-contribution is made at end of financial year, and I have a feeling the government will make people wait the full final year before withdrawing funds?

eNTe	\| \| 2010-08-19 12:52:54

This website's FAQs suggests that requirements may be met in less than 4 full years. So consistent with Rach's comments on timing of FY contributions, 2+ year period may be all that's required. See FAQs, quoted below:

"Is there a minimum time period that my money is tied up?"
The four year rule would allow you to meet the requirements in less than four full years, provided at least $1,000 was contributed by 30 June 2010, 30 June 2011, 30 June 2012, and again on 1 July 2012

Rach - State & Fed grants

| | 2010-05-15 10:40:30

The only reason I didn't open a fhsa when they first became available was because I was hoping I would be able to take advantage of the extra $7k from the feds & the extra $10k from the NSW govt. That is the one and only reason.

Anonymous

| | 2010-05-15 10:51:26

What would they mean by an approved mortgage under the relaxed ruling? Why can't the government just allow the potential first home buyer to take it out for buying a new home at any time?

Jeff	\| \| 2010-08-19 12:08:06

Because they have designed them for people that require assistance in saving for their first home. They are not meant for people that can buy a house anytime they want.

To pay off a mortgage requires great persistance, 4 years to save for a deposit is a great way to start it.

Nic - Dr

| | 2010-05-15 11:47:55

Assuming you put in $5000 every year, in the 4th year, you would get an approximate 17%/4 - 3%*= 1.25%. In the 3rd year, you would do better: 17%/3 - 3%= 2.67%.

However, if the difference* is about 4% as opposed to 3%, you more or less break even in the 4th year. If it is 5%, then you lose in the 4th year.

Whether you stand to lose or gain in the current year depends on how much you put in FHSA in the current year (to get the 17% from the government), how much you already got in the FHSA (i.e. how much the 17% from the government has to get diluted) and how much the difference* is.

Which is why I think they should make it more flexible on when it can be used, unless the government wants to please the banks for political reasons.

* The difference in mortgage interest rate and deposit interest rate after tax all of which varies is:

deposit % - tax % - mortgage %

This is currently about 3% if you get a good deal.

Tiff	\| \| 2010-05-16 16:44:29

My understanding of the "four year term" is not that you have to have your money in for 48 months; but that contributions must be made over four financial years - so provided you make your first deposit before June 30 in one year; the minimum contribution in the each of the next two financial years; and your final deposit after 1 July two and a bit years later, you have complied with the contributions across four financial years; and can then withdraw your funds immediately for your deposit. The way this website worded the "four year term" seems to suggest 48 months minimum. I hope this is not the case, as I have been working on a 30 month basis for my deposit!

I think the option to buy within the timeframe the account must be opened, and not lose all your money until you're 70 when you can finally access it again is a big step forward. Who thought of that superannuation term in the first place?!

Jeff	\| \| 2010-08-19 12:06:10

My understanding is the same as yours around not requiring a full 48 month term. I agree it is very misleading the way they keep referring to it as a 4 year term. If you read the details it just says 4 x $1000 contributions over 4 separate financial years and it is mature.

The super idea is to motivate people to save gradually and then use this money on their first home. If your not completely set on using this money to purchase your first home then this account isnt for you.

Tommi - Why is this so hard?

| | 2010-05-17 11:52:56

First of all thank you for all the previous comments, I own a FHSA and was in the shadows for a while. Reading through this website does help a great deal. I would constantly complain about this FHSA to Commbank because I'm financially in a position to build, but the 4 year restriction was too much. (Haha, I always thought Wayne Swan heard my whinging and thought, better do something about it.)

Can the government look at offsetting this account towards your actual home loan? Why pay into your account at the end of your four years if you're paying interest during that time. If that is the case wouldn't you be better off just waiting till the end of the 4years in any case and then using it as your deposit? Sure I understand people want to get into the market quickly, however how I was bought to save and in my opinion for people looking at getting into the property market is to have as much saved and paid off.

Can someone please clarify for me.
Tommi (Age 20)

Johnnie

| | 2010-05-17 16:00:11

Hey Tommi

Thanks for sharing your age, it really helps answer your question!

I suggest getting the PDS from the institution you have the FHSA with and read it thoroughly.

Hope this helps enlighten your 20-year-old position on buying a house!

Jing Jong

| | 2010-05-17 19:47:44

I do not understand how this is a significantly useful change to the existing policy. FHSA are designed to encourage saving for a house, so it stands to reason that money in the account should be available for a deposit (if there *must* be a minimum time limit for the govertment contribution, why not make it a complete financial year?)

Regarding the comment earlier about paying off a mortgage vs saving for a deposit - while you make a valid point, this isn't necessarily a useful comparison in the case of FHSA. If I can afford 2K repayments a month, think about how much the market is likely to move in the >2 years it would take to save for a deposit... any help to shorten the lead time saving for a deposit (even by a few months) could allow first home buyers to enter the market significantly earlier!

Daniel

| | 2010-05-19 04:15:02

Hi, can anyone answer this question. Is there a max number of years you can have the account open. At the end of 4 yrs do you have to buy a house?

Paula

| | 2010-05-19 12:06:53

First Home Saver accounts can be open by anyone under 65, so if you never bought a house you could keep the FHSA account open right up until you're 65.

So looks like you could keep getting the gov't bonus every year until you hit the $75k limit!

Greg - Why is this so hard?

| | 2010-05-19 18:48:49

This change will not make a difference to me. I always intended to actually "save" a deposit over the next few years anyway.
Does anyone know how the Govt contribution will be calculated? eg will it be paid annually at 17% pa calculated on the daily balance like most term savings accounts? If you withdraw before the EOFY do you get nothing for that year? If you opened the account in August do you get nothing for the first FY? I find the online calculators very unhelpful in answering any of this.

Jeff	\| \| 2010-08-19 11:55:45

At the end of each financial year, the government contribution is calculated from the contributions you have made.

Rebecca - This doesn't help

| | 2010-05-20 10:58:07

This is no improvement on the current scheme. The biggest hurdle for first home buyers is the deposit. If you can't access the money within 4 years as a deposit then it's useless for me.
I won't be using this scheme. I would use it if you could access the money within four years for a deposit.

Rajeendra Perera - Mr.

| | 2010-05-20 12:55:34

I do not think this change would attract many. The FHB account has been designed for young australians, not those who migrated recently and are now of the ages of late 40s or early 50s (or simply closing to grave). Therefore, I think I will soon start a FSA savings account for my first home in the Lidcombe graveyard.

David - A step in the right direction

| | 2010-05-23 18:46:07

Like many who've opened an account, I've always been somewhat bemused by the 4 year superannuation rule. It's a significant contribution to mortgage savings to engage in this scheme, but this restriction has stopped many from opening an account I'm sure.
I'm ambivalent about the retention of the minimum 4 year term before one can access the funds. Although it won't allow people the flexibility to use these funds for their deposit in some cases, it forces a savings structure which is a good thing. Saving for a deposit is going to be equally rigourous as paying a mortgage people.

Jdawg

| | 2010-05-28 20:14:30

A revised scheme, whereby funds can be contributed toward a mortgage after 4 years will mean that a house can be bought while savings are accumulated at a very favourable rate of return. The revision will make the first home saver scheme appear much more favourable to those people who require the flexibility to consider buying their first home within the next 4 years. The only disadvantage I see in this is that a home deposit must be saved outside of this account if a house is acquired before 4 years.

Jdawg

| | 2010-05-28 20:15:51

And as David has said above - a deposit is next to nothing compared to a mortgage...

Scott

| | 2010-05-29 17:01:12

I wasn't interested in the First Home Saver account before, but now with the possibility of rolling the funds into an approved mortgage at the end of the four year period is a great idea.

I would definitely open one with those changes in place.

Anonymous

| | 2010-05-29 20:56:53

The 4 year lock in period is ridiculous. Possibly a 6 month qualification period after which time funds can be used as a deposit would be a better option. The new changes mean nothing if you can't use your money for a home deposit within the 4 years. Swan you are clueless.

james

| | 2010-05-29 21:05:00

What is the use of the FHSA if you want to buy a house within 4 years? i can't understand why the government won't release the savings in the FHSA for a deposit when people most need it (eg, within the 4 year time).

David

| | 2010-05-30 11:57:21

I think the change is a good idea, but I would like the changes to go further, I don't mind saving for 4 years minimum, but given how expensive houses are now I think the maximum of $75,000 could be increased to $100,000 or more. If I am going to save for that long I intend to save more than $75,000 and it is pretty hard to find a house or apartment anywhere near the city for less than $400,000 now and in 4 years times they will probably be more like $500,000. Don't think too many banks will want to lend me $425,000 at 9% interest. Basically if you don't have a dual income and no kids you will be renting or living a couple of hours from work with no transport and lots of car expenses on top of the mortgage and energy bills. Actually renting sounds ok for the next 4 years or so, I just dont like landlords screwing me for more money time and time again to build their property empire, and I got no choice but to pay up, cause the rental market is so tight. But until the baby boomers start ...

Rachel Carter - First Home Savers Account

| | 2010-05-31 10:30:44

Excellent change, I'd much prefer the money to go into the home loan rather than superannuation. An opportunity arose and I unexpected purchased before the four years.

Mursel Duz - first home buyer

| | 2010-06-06 15:29:50

We have opened this first home saver account 2 years ago and never been told by the bank that we can not buy a house before 4 yrs rule. Me and my wife $25,000 stuck in this account. We couldn't wait and purchase our first home that will be very helpful to get this money into our Home loan account. Please take of this 4 yr rules ASAP.

Jeff	\| \| 2010-08-19 11:42:49

Take it as a good lesson to read the details before signing up to something more severe such as a mortgage...

Tom	\| \| 2010-06-08 14:47:42

Please admin, could you provide further details of which bill will contain this change and when (approximately) it will be tabled.
Also, I can't see any good reason not to backdate this change to the budget announcement. If the gvt believe it's an improvement then let us have the benefit.

ben - First Home Savers Account

| | 2010-06-09 22:00:51

My wife and I both opened a FHSA last year as we had no intention of buying a house for a couple of years, however, with the property price rises throughout last year and early this year we thought it was better to get into the market, rather than wait another 3 years or so and we bought a house.

We knew that this would mean that our FHSA's would be placed into our super accounts, however, we still thought that this was the best decision.

It now turns out if we waited a few more months that we would have been able to contribute our FHSA

ben - First Home Savers Account

| | 2010-06-09 22:03:31

(sorry the complete comment didn't work the first time)

My wife and I both opened a FHSA last year as we had no intention of buying a house for a couple of years, however, with the property price rises throughout last year and early this year we thought it was better to get into the market, rather than wait another 3 years or so and we bought a house.

We knew that this would mean that our FHSA's would be placed into our super accounts, however, we still thought that this was the best decision.

It now turns out if we waited a few more months that we would have been able to contribute our FHSA

ben - FHSA (second half of comment)

| | 2010-06-09 22:05:38

It now turns out if we waited a few more months that we would have been able to contribute our FHSA

ben - FHSA (sorry - last try to get

| | 2010-06-09 22:08:54

My wife and I both opened a FHSA last year as we had no intention of buying a house for a couple of years, however, with the property price rises throughout last year and early this year we thought it was better to get into the market, rather than wait another 3 years or so and we bought a house.
We knew that this would mean that our FHSA's would be placed into our super accounts, however, we still thought that this was the best decision. It now turns out if we waited a few more months that we would have been able to contribute our FHSA

Michelle - FIRST HOME SAVER

| | 2010-06-10 11:13:30

When I opened the account I was NOT informed that the account had to stay open for 4 years or that after the 4 years if a property has been purchased the money from that account would go straight into my super fund.
I am only 23 and do not need the money in my super account at this stage.. If changes are made it will make a HUGE difference!!

john	\| \| 2010-06-10 13:08:03

When I first opened this account no one at the bank explained that I could not have access to the funds till 4 years after opening this account. Now, I wish to purchase a propeerty and it disapointing to hear the bad news. I don't understand how anybody in government could allow some account as this one to be set up. I hope that the legislation gets changed as soon as possible so I can purchase a property and use the funds I have in this account.

Andrew B - Offset option

| | 2010-06-10 19:22:12

If the government is adamant about not allowing release of the money until four years have elapsed, a new clause allowing it to be used as a 100% offset account from two years or so (with contributions continuing) would allow people to purchase, whilst still saving for their home. It is roundabout but would certainly work for me.

J Lee

| | 2010-06-13 19:31:05

To find out that the funds can only be withdrawn after 4 years or put into a super fund is a rude shock, especially when NOBODY at the bank could explain how this account works and the PDS has no information about. Most 1st home buyers are younger than 30 and to be made to wait until they are 60 to use those life savings is ridiculous. The only criteria should be to use it for your first home. If it is going to be used buy your first home it should be able to be withdrawn. That is the whole POINT of the account. It should be able to be put into the mortgage or for the deposit. not just for the deposit.

Simon - Supporter of FHSA

| | 2010-06-15 14:29:06

I think the proposed amendments to the FHSA is great.

I don't think people understand that saving for a home is a long term commitment and cannot be done in 1-2 years. Hence, the Government should not change the 4 year period otherwise you will not have enough for a deposit.

For those people considering the FHSA you need to consider that this is a long term account that will provide you with a high return other the long term and subsequent interest can be earned on the account - leaving you with a nice amount after 4 years. As mentioned, if you are smart about it, you can use it to your advantage and play around with the timing of deposits and ultimately reducing your term.

For those that signed up to the FHSA and didn't know about the 4 yr rule - use your eyes to read the PDS. It is YOUR responsibility.

Marc	\| \| 2010-06-19 20:03:14

Don't you think peoples circumstances can change dramatically in a four year period. Should OUR money that we worked for and have paid tax on be held hostage for 4 years. I think more changes need to be introduced, at least allow the funds to be accessed early and in doing so void the interest earnt.
Is this not a win-win option ?

Jeff - Best post I have read so far!

| | 2010-08-19 11:32:59

Best post I have read so far! Agree 100%

Daphne - FHSA

| | 2010-07-16 13:52:52

I fully support the proposed change to allow the fund to be transferred to a mortgage account after 4 financial year if the account holder purchase a house before then.

The purpose of the FHSA is to encourage house buyer to deposit towards their house purchase. Hence, the account balance should be allowed to be transferred to offset the mortgage account regardless of when the buyer buy the house.

This change will encourage more first home buyer to take up the FHSA.

John - Definitely

| | 2010-06-16 17:10:53

Great change!

Will definitely start putting in more money into that account once those changes take effect.

Connor - Should apply to all FHSA

| | 2010-06-17 14:05:25

The changes should apply to all FHSAs opened and not just those after the legislation is passed. Otherwise, it would be grossly unfair to all who opened one when they were first available.

Marc	\| \| 2010-06-19 19:59:30

I think the account is useless, I have had it for two years and now i am going to buy and i can't even access my funds. Real good way of restricting first home buyers isn't it, so much for building the economy back up. Well i have asked the ato if i give them their measely 17% interest they paid me will they release my funds...so i can only wait to hear their answer for that one!

Nick	\| \| 2010-06-27 13:20:34

I originally got the account as it seemed very appealing at the time and given my circumstances then. Currently, however, I am regreting opening the account as my situation has changed for the better and the possibility of buying a first home is quite real. The problem for me is having this money tied up for another 3 years. I would be happy to pay back any interest I've made with the account if it meant I could use any of my own contributions toward my first home. I would also be very happy if these proposed changes came into effect as well. It seems that these changes would be more economically sound for everyone on a larger scale too.

Sam	\| \| 2010-06-29 13:03:12

I think that the proposed changes are great, but I'd like them to go further - particularly in the case of compulsory rollover of these balances into super for the following reason - if you have saved for a number of years, and are still young, you risk losing a large proportion of your home deposit to super contributions tax. In this case the government will get back in taxes much more than they ever offer as saving incentives.

Tim	\| \| 2010-07-05 14:59:58

does anyone know when the proposed changes are comming into affect?

thanks

SF - First Home Saver Accounts

| | 2010-07-06 12:45:25

I think personally it's great and suits my situation very well!

My girlfriend and I had always planned to put 5k a year in financial years 2009/2010, 2010/2011, 2011/2012 and then post July 1, 2012 to have access to the money. With the first year already taken care of, and both of us getting full time jobs next year, I would strongly advise others take the same lead as us.

We will continue putting the 5k each into the FHSA but because we are living at home (minimal expenses), we will have an alternative stream of savings in a normal savings account/term deposit. We intend to get as close to the deposit figure through our savings accounts and then use the FHSA money as mortgage repayments (provided our lender who will provide an IO loan will allow us - need to find that out).

John	\| \| 2010-07-07 11:26:00

If the first home saver account must be closed, say I have purchased a home within the minimum 4 years, and the money needs to be transferred to my super account, will this count towards my non-concessional cap? what about the government co-contributions of up to $850/year, does this count towards the cap as well? take note that the super gov't co-contribution of up to $1000 does not count towards the cap...

Farid - FHSA is still too restrictive

| | 2010-07-16 18:47:29

Its great initiative for the government to improve FHSA features but I dont think the account will see a great take up due to existing restrictions.
Great for the extra 10% annual contrbution and increasing the cap as it will result in greater deposit if you keep the account for 4 years. What if you want to buy a house before the end of the qualifying period? means that the home buyer will have to gather deposit from another source as their funds are still locked until the end of the 4 years. Other cases could be that the person would not want to buy a house and open a business, travel for a long period or move overseas permanently which they cannot do as the funds can only go towards a house or into super.. I would suggest that the account to be more flexible with the option of withdrawing funds sooner for a house deposit (could be set interest or structured tiers based on the number of years that they held the account- structured tier would be more of an incentive to keep it in for...

Jeff	\| \| 2010-08-19 11:25:38

If the money could be withdrawed to go travelling then it wouldnt be a First Home Saver Account. The benefits the government are providing is to help people buy their first home.

One idea I do support though is if you could withdraw your money after subtracting all the benefits you received over the life of the FHSA. Although this could get messy regarding tax brackets etc.

Beau Robertson - What a novel idea!

| | 2010-07-17 13:12:48

The idea of being able to use savings accumulated using a 'First Home Saver Account' to buy a first home is truly novel. It's almost intuitive.

Initially it seemed to make sense that those saving to buy a house would benefit from having this money channelled into superannuation which they could accesss when 65 or 70. The more I have thought about it though, the more sense it makes that if someone is saving money to buy their first house, they should be able to put that money towards the cost of their home.

OK. Facetiousness aside, of course this money should be available to channel into a home loan! It should be able to be used as a deposit before the 4 years is up! Honestly, how much money does the government think first home buyers can afford to save? For anyone in their late twenties or above, they may not want to wait 4 years to access THEIR funds.

Consider this scenario, a couple are saving to buy a house and each have their own First Home Saver Account. They acc...

Owned but lost - What about a High interest Hom

| | 2010-07-17 13:22:19

I was married and took a mortgage for my first Home. Then 5 years later I was forced by lawyers to give the house to my ex-wife. So why doesn

Lisa - Still concerned

| | 2010-07-23 16:26:11

I don't think the new changes to the 4 year rule make much of a difference as it still restricts me purchasing a property before 4 years is up. I will still need to wait 4 years to access my money for a mortgage - which I can't afford without it - that is I can't afford to buy one in the mean time as my savings will be stuck in that account. 4 years is too long for me to wait.

Felicity - Reporter

| | 2010-07-26 14:49:41

Hi There. My name's Felicity Williams and I'm a reporter at the Herald Sun newspaper in Melbourne. I'm writing up a report on the First Home Saver Account and I'm hoping to have a chat to some people about it. I'm looking for anyone who has a FHS account or were considering opening an FHS account but ended up going with some other savings method such as a term deposit. If you are happy to have a chat with me I'd really appreciate it if you could contact me at williamsfe@heraldsun.com.au. Thanks!

AB2884 - Still Confused...

| | 2010-07-29 21:31:35

I am just about to buy a unit as a great opportunity came up. I have money locked into one of these accounts, luckily not too much as after I opened the account and started depositing my situation changes and I realsied I will likely be able to buy before the 4years is up.

The original rules were that you needed to deposit in a minimum of 4 financial years but that did not have to be consecutive. So if this change does occur can I access my money after 4 years without having to keep contributing in each financial year? because I would prefer to put it all into my mortgage!

Jeff	\| \| 2010-08-19 11:16:40

You need to contribute $1000 in four separate financial years for the account to be mature. So in the 4th year you could put $1000 in on the 1st of July and take all your money out, effectively making it just over 3 years.

Kylie - Bailing out

| | 2010-07-29 23:14:02

I opened a first home saver account today, only after discovering they were looking at changing the rules. I'm confused re the 4 year period as the info provided is unclear. I have found info that suggests you only need to contribute over 4 financial years. This would indicate in my case I could withdraw the funds in July 2014, making it 3 year period my savings would be tied up. I asked at the bank when I opened the account but they had no idea, I knew more than the teller did. After reading the above posts I will be cancelling my first home saver account and withdrawing the funds within the 14 day cooling off period. The interest rate is great, but with the price of housing forever increasing it kind of defeats the purpose....

justin - first home saver

| | 2010-08-02 17:45:21

i have been saving very hard butt prices
are going up and i have two young chidren and i am finding the terms very diffelicalt by the time i bild pries will go up .ihave the deposet but cant releace for two years and two make matters worce bank staff no nothing about the account what do i do

Jenna

| | 2010-08-08 16:23:45

learn to type english?

You just have to wait

Ashley

| | 2010-08-04 17:07:36

While the FHSA seems like a good idea it does nothing to address the real problem. Even if they got it right and there was no four year restriction the fact still remains that property is far overpriced and out of reach. The first thing they can do is get rid of the tax incentives for property investors. Secondly the release of land needs to become more efficient. There are plenty of others too but the point is pouring more money into the demand side of the equation only makes the problem worse. The bottom line is prices need to come down to sensible levels.

Jeff - Agree

| | 2010-08-19 11:09:46

I agree with this 100%. The FHSA is negligible compared to the housing affordability issues out there at the moment.

Roger

| | 2010-08-07 02:23:17

Hi does anyone know when the proposed change will take effect?

Jenna

| | 2010-08-08 16:24:25

Came here to find this information myself. Great that its listed in budget changes, but i was confirmation!!

Jason - Banks Not Helping

| | 2010-08-09 21:23:40

I am interested in opening one of these accounts in the next 12 months after I clear some bad debt. I have recently seen some of media reports about poor take up from the public. Part of the reason would be the lack of support and advertising from the banks. I am gathering so they can push their own products.

Banks and credit unions I was looking at to open up one of these accounts were, St George my current primary bank, CBA, Defcredit, Australian Defence Credit Union, Police Credit Union and Westpac.

Of all of those banks the only one that advertised the account on their website was Defcredit. The only other to offer it at all was CBA, there was nothing on the website, or in the branch, however when I asked at CBA they produced a brochure from behind the counter and werent exactly positively pushing the account. Something to think about for the organisers.

Jenna

| | 2010-08-24 14:29:34

Me bank has the best interest rate so Id go there first.

Fi - First home saver account

| | 2010-08-11 21:46:47

The change that allows account holders to purchase property before the end of the four years is fantastic! As an account holder I find the four year wait to be a huge limitation especially with how quickly land is selling, and me wanting to purchase land, but can't due to the conditions of the account.

Kristy - First home saver account - fou

| | 2010-08-12 15:51:07

Firstly - would just like someone to clarify if they know when the rule that FHSA savings can be transferred into a mortgage will come into affect.

I have some money saved in my FHSA, and if I was certain that I would be able transfer it to a mortgage I would put the rest of my savings in there straight away!

But as it is, I am a casual worker and need to have a stash of cash which is readily available in case I cannot work.

I think FHSAs are a great idea, but I just really wish they'd say something official about if and when the money can be transferred into a mortgage rather than your superannuation. It's very confusing hearing conflicting things so I'm hedging on the safe side.

So, if you know when FHSA will be able to be transferred into a mortgage account, please post it on www.firsthomesaver.com.au as soon as you know!

Marco

| | 2010-08-14 12:56:21

I'm sad that I will have to wait at least 2 years and 2 days to buy my first home upon opening a FHSA.

Locking my miniscule deposit up in a FSHA under the ill-informed impression the Govt would change legislation to allow me to access the funds UPON purchase of my property means I'll probably only contribute the minimum $1,000 to retain access to my funds and still fail to have a deposit when I buy in 2011.

I didn't expect to have a big deposit, yet I thought the FHSA and First Home Owner's Grant could allow me to avoid mortgage insurance. Now if I wait 2 years and 2 days, the grant may be taken away and the hard efforts of saving in a FHSA will evaporate. I'm sure house prices won't fall $7,000 IF and when the grant is taken away.

The FSHA idea is great, yet I think still impractical. I wonder if Wayne Swan would promote a FSHA to his own son or daughter (assuming he doesn't just drop a $50,000 deposit in their laps)

Tony - Changes? When?

| | 2010-08-17 16:19:25

I am very disappointed at how the government isn't disclosing further information regarding the changes to the 4 year rule. Nothing has been mentioned since the budget report.
I understand that it takes time for this new proposal to be legislated but i wish the goverment would give us a more accurate time indication of when it is going to occur so that we can plan out our home buying strategy.

Jeff - Missing the Point

| | 2010-08-19 11:04:12

I think people are missing the point of the FHSA. They are for people who are struggling to save a deposit for a house. Not for people who could buy a house whenever they want.

These changes make very little change to me as for the people its designed to assist, how can they pay for a deposit without using their FHSA money? The only advantage I can see is if they came across some money from their family they could buy a house straight away and then put their FHSA money in later when it reaches the 4 years.

I think its a good change but not a huge one.

Lots of my friends rubbished the idea when it started saying the 4 years was too restrictive. I said I bet noone here owns a house in 4 years, this is still true and I have a nice deposit ready in my FHSA and they have next to nothing.

It doesnt have to be a full 4 years either, 4 x $1000 payments in four separate financial years so you could do it at the end of the first financial year and the start of the 4th making it a little ...

Hans	\| \| 2010-08-19 12:36:42

None the less the number one reason cited for not taking the account up is the perceived risk of losing your savings due to a change of circumstances. This is a valid concern, and as such the government should look at altering the rules that could prevent first home buyers from accessing their savings when they need them most.

Jenna

| | 2010-08-24 14:32:53

As Hans said, the number one reason people do not take up this account is because of the four year restriction. No one knows if they will get a massive payrise or something that means they may be able to buy a house.

Julia Gillard even said she doesn't understand why more people dont take them up, so obviously they want more people to use the grant, so why not remove the reason no one wants them!

Sieuy - the evidence is enough

| | 2010-08-22 10:42:26

After reading all these posts, it's quite evident that the government should ease up on that 4 year restriction to get more demand from all the house hunters in Australia. Who can plan 4 years in advance to buy a house? If we see a great bargain on a house that we really love, we'd want to get it straight away. We wouldn't be able to wait 4 years because by that time, that house would have been bought by property investors overseas.

sam - dr

| | 2010-08-26 23:39:18

ya, the new rule to shift contributions at end of 4 yr, for property bought already is gr8.

Tiff	\| \| 2010-09-03 17:29:50

When is the government going to get on and make the changes it proposed in the budget into law? Does 'consulting' me stalling on this? Or is the government thinking of taking it further and abolishing the 4 financial year rule altogether (a big step forward!!!).

Does anyone in the government read these emails and act on them????

TJ - good

| | 2010-09-04 12:09:27

I think they can do better with the raising of the savings threshold so that we can benefit more (maybe to 1000 atm its 935):) BUT everything they are doing is a step in the right direction. I don't agree they should abolish the 4 year rule.(maybe 3?) The account is there to set up a savings goal over a time period for younger Australians. But allowing you to default the savings into a mortgage after 4 years, is a good direction to go in, rather than loosing it all to my super, which i won't see for another 40+ years!

TJ - fhsa

| | 2010-09-04 12:18:12

Oh, and I hate, how after my tax it takes 6-7 months to deposit the contribution... I miss out on interest, although not much, but every dollar gets me closer to my Great Australian Dream...

(gee)

Brenda - First home loan savings

| | 2010-09-06 09:33:19

It would be a great advantange to be able to contribute to the savings at a before tax situtations , as like superannuation.

Uq5Ck

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