We want to hear from you! | First Home Saver

mischa10 - It's good but is it enough?

| | 2008-04-08 06:20:12

i think it is a good step in the rite direction but i'm not sure it will let me save enough? where i live properties are still going up in value

Sarah Guiver

| | 2008-04-14 20:32:02

Is this scheme available for us if we want to buy land and build our first home?

Abhishek

| | 2008-04-29 18:10:41

yes it is

Kwasik - salary sacrifice scheme

| | 2008-07-14 08:02:53

Is this available for salary sacrifice scheme

Chad R - Salary Sacrifice

| | 2008-10-01 22:40:20

No, deposits must be made after tax.

thomas - mr

| | 2008-04-15 12:14:58

hi i think its a great idea but the minimum four years is too long.. a three year minimum would attract far more people to the scheme..

Mark - Four years too long

| | 2008-05-20 20:27:48

Yes, I agree, coming up with a deposit is not that big a deal, even on a modest income - offering a strong incentive to start saving is what young people need. I think it should be possible to draw the money out after 24 months, or at a monetary threshold (Say $40,000) rather than four years regardless of what you have put in

Miranda - Too Long

| | 2008-07-16 00:18:14

Please don't put a time restriction on this - I have already been saving for 6mths and hoping that I can continue to put as much away in the next 12-18mths to afford deposit on a modest apartment. I have been looking up the first saver since heard about it in March thinking this might be the break I need but four years would make it useless to me - really disappointed.

Michelle

| | 2008-10-24 04:44:38

I agree. What if I find the perfect house next year? There should be no time restriction

Matt Fallon

| | 2008-04-16 08:47:54

I like the idea, but I also find the 4 years too long - it may be good in the future (for people just starting to save now) but I have been saving for 18 months already. I feel I will be able to buy in 1-2 years and it upsets me that although I have been doing everything I can the government will just overlook me

Anonymous - people who already saved are l

| | 2008-04-17 23:48:52

I agree with Matt. It may be good start for someone just beginning to save but, but for those of us who have already been saving for a deposit by putting away our hard-earned AFTER-TAX money only to be taxed again on the interest, there is no benefit to us at all!!!
Many people are well on their way and do not need another 4 years but still fall short of a deposit. I think there needs to be some kind of retrospective payment for people who can show regular savings in the past for a home deposit. And there should be no minimum period of time to hold the money there.

Phil - phil

| | 2008-05-07 02:50:43

Miranda - Phil

| | 2008-07-16 00:23:54

Phil - either you have really gone without to get anything you could in life or you bought a house when they were 45K, not 450K - please understand that cost of living is higher now than it has ever been. I can't think of one handout I have received from the Govt and yet GST, Super, HECS are all being paid out of my salary; all things my parents generation didn't have to worry about. I am extremely fortunate to be living in this country - it is much worse in almost every other country; however if this Govt can afford to have surcharges because we are all paying income & GST taxes and offer this kind of assistance i think its only fair that they do it right - without a time limit.

Bengt - Welfare for the wealthy.

| | 2008-10-01 07:32:15

I am a bit puzzled to why the scheme would exclude people who have been saving for years (and paid tax on their earned interest) and are ready to buy soon. While at the same time the sceme would mean that a wealthy family could qualify to get $850/year/child from the government by meerly transfering $5,000 into an account of each of their children every year. (and many of them will do this!!)
I would like to suggest the following changes to the scheme.
1) Scrap the 4 year limit. It is unfair.
2) Ensure that the $850 goverment subsidy (17%) is linked to the person saving from their earnings rather than just by receiving money from a rich family member. I don't think we need to provide goverment support to the already wealthy.

aspen - Re: $850 subsidy

| | 2008-10-27 22:28:18

Hi

Sorry - abit off teh topic, but could I have more info on this $850 govt subsidy please - where do I find more info? Ta!

Aspen

Matt Fallon

| | 2008-04-16 09:01:15

Also what happens if you do buy before the 4 years? Is the money then put into super? or Given to put on your house? I dont understand why there is a time limit anyway...

Yes it stops those that are well off using it as a method of getting a little more cash before they purchase there 1st home - But those that are well off will see it as a good way to get some extra cash into your super!!! and with the govt contributions favouring those on higher income tax levels this will let them get some money that the govt does not give with the super co-contribution (As it cuts out at about $50g). Why give with one hand and take with the other!

Leif Frauenfelder

| | 2008-04-16 09:09:42

Its a really good idea...but what about for us young people who are trying to get a head start now....u talked about that hypothetical that that girl would have a certain amount of money by the age 29...I'm currently 18, and just wanting to set my future now.... so this idea doesn't really work for me

Matt Fallon

| | 2008-04-18 08:08:10

Leif it works really well for you - Im not sure what more you are after. If you are 18 then 4 years of saving will be great for you timewise and lets you, as you say, set your future now.

LocalHero - 4 years is nuts

| | 2008-04-19 22:59:13

This scheme is only really attrractive to the very young. I plan to but in the next 4 years and having the money locked away is not attractive.

Melissa - I agree 4 year minium is too l

| | 2008-05-14 00:26:31

I agree that 4 years is nuts. I would not want to be locked in for that long with the only way of getting your money is via superannuation. What if i meet a partner who aready has a house? Then is a waste of money. I should at the very least A) use the balance for a house earlier than 4 years B) be able to get the principle back in the case i no longer require for a home, interest could be rolled into super and the goverment could take their contribution back.

ED	\| \| 2008-10-04 00:48:13

I agree - it is attractive if you are in your teens and want to start saving for the long term. I'm 25 and have already been saving for a while. It will not take me 4 years before I can afford a deposit, more like 18 months/ 2 years. It is disheartening that this scheme won't help. It is targeted at a very narrow section of the community.

Louise - What company is behind this we

| | 2008-04-26 20:58:59

Hi there, could you advise what company or agency is operating this website? Thank you

Kylie - Why not for investment if it i

| | 2008-04-27 19:57:19

Why can't this be to save for an investment property if it is the first house you have ever purchased? Isn't this about being able to set yourself up? An investment property would do this?

Rick - early access - for couple

| | 2008-04-28 14:37:01

hi there,

in the FAQ section, I read the following:

My partner wants to buy a house next year. If I open a First Home Saver account, can I get access to the funds if we buy a house together?

It is possible for your balance to be released even if the four year conditions has not been met, if the account provider is satisfied that your partner meets that condition in respect of their own account.

My question is, what is this means?
"if the account provider is satisfied that your partner meets that condition in respect of their own account" ?

as in, as long as the couple have enough money for the down payment in their FHSA, they can access the money tax free?

please reply.

thanks

Tracey

| | 2008-05-05 21:13:16

I was a bit confused by this too and I am not certain I have got this right but this is what I assumed it meant when it says "the account provider is satisfied that your partner meets that condition in respect of their own account" means your partner must have had their account open for four years. So the scenario quote "My partner wants to buy a house next year" doesn't mean next year as in 2009 it is a question someone would be asking in say three years time. Does that make sense? Do others take it that way?

Lyndsay - nah they've got you there

| | 2008-10-16 07:00:19

No what I believe that means if your partner has held their FHSA for 4 years and then pulled the money out and you have only had yours for 2 yrs, you can take it out but one of you has to have filled the 4 yr requirement. Crap I know!!

Ken Lee - why 4 years?

| | 2008-04-29 00:30:11

why locked 4years?
when it first introduced should start with 1 year or less locked for person who started already.
1year later 1year, 2years 2years
should be 4 years or more after it introduced minimum period of 4years,

Or no minimum period.
why 4?
4years for next election?
4years for property investor?

karen - 4 year election

| | 2008-10-26 04:49:32

for us 18year olds who may not buy for 10 year,what happens in 4 years and rudd out. are contributions scrapt

karen - 4 year election

| | 2008-10-26 04:56:10

NO MORE CONTROBUTIONS

Rowan - Too restrictive for those who

| | 2008-05-07 06:31:57

Why restrict the use of this account to those who are needing to save for at least four more years? This needs to be made available to those of us who are a year or two away from accumulating an adequate deposit. We have been saving hard under the current economic conditions and should not be excluded because we have already made a start to saving a deposit.

john - So many questions

| | 2008-05-13 17:46:08

Can we transfer from one FHSA account to another provider? This is necessary to avoid banks hiking fees or lowering interest rate in the 2nd year.

Is the money guaranteed in the case of a bank or building society going bust?

Unused funds should not go to super. They should be returned but taxed at normal marginal rates.

What is this going to do to house prices when thousands of FHBs are withdrawing their money in 2012 an all bidding on a small number of houses for sale with $80K in their pocket. hint- expect house prices will go up by the same amount cancelling out any benefit of the scheme.

Investment returns should be guaranteed. Most young people are not aware that the sharemarket can provide negative returns even after 4 years, especially in this environment.

So much more needs to be investigated, by people with a bit of knowledge how things work.

Donna

| | 2008-05-14 01:25:34

I don't see the point at all. Funds added have to be after-tax money, so first you are paying your standard rate of tax on your money and then adding it to an account that if you choose not to use to purchase a house is going to be added to super and taxed again at the standard contributions tax rate, and all for the advantage of earning an additional $750 pa if you earn between $40,000 - $80,000. What a waste of time.

If the government wants to help, abolish stamp duty for all first homers and increase the first home owners grant to a more realistic amount based upon savings accrued at the time of the purchase or allow access to preserved super at the time of purchase.

Paul van der Loo - I see a house, I buy it I lose

| | 2008-05-19 03:29:24

I found there was a major disincentive to using this scheme in the FAQ the other day.

For example

"Is there a minimum time period that money is tied up?
First Home Saver accounts are designed to encourage people to develop good savings habits, and a requirement is that before an individual can withdraw their funds the account must have received contributions of at least $1,000 in each of four or more financial years."

My problem is I am a single income saver, I'm already saving but this scheme would help me to save more as I get taxed on my current savings. I already exhibit the ability to save but would still be subject to the 4 year term. Should I find a house at the right price before the 4 years I can't use the money I put into this scheme to pay for it. Not only that but it would go into my super instead, so I'd be in a worse financial position as financially it is better to pay off a home loan quicker than to put money into super.

So effectively I'm locked into 4 y...

Dani - It's not 4 years!!! It's 3 y

| | 2008-05-19 19:02:47

Taken from the official website:
"To withdraw their funds, minimum contributions of $1,000 need to be made over the course of at least four separate financial years"

Doesn't that mean you could deposit an amount over 3 financial years and a final amount on July 01 of the next year? (3 years + 1 day)

In the future, you could even deposit on the 30 June of one year, deposit for the next two years and deposit again on 1 July the next year. (2 years + 2 days)

Aren't I correct?

Greg - other factors at play

| | 2008-05-22 18:57:59

First and foremost, although this new scheme has elements of inflexibility and seems cumbersome in parts, it is good in principle.

It is encouraging a saving culture, higher deposits reduce risks of "negative equity" situations, which seems to be becoming more common in the past year.

I suspect that the housing boom and the subsequent "afforability crisis" has been caused by the unholy alliance of the 4 following factors:

- halving of CGT after 1 year. This should never have been introduced into housing investment. What's the point anyway? Housing investment is supposed to be long term, not a 1 year transaction.
- historically low interest rates
- abuse of "equity mate" and drawing down for depreciating purposes.
- reduced minimum deposit standards, there

I don't consider that negative gearing is a big factor here, it's been around since, well forever. The exception being a shortlived abolition in the 80's and it was quickly brought back in b...

Rob Robse - Good points Greg

| | 2008-05-28 09:57:04

I think you suggest some very good points, often people come out to knock or overtly praise such a Govt scheme as this, when most of us need to take a step back and look at the big picture. Of course the Government is not going to "fix" home affordability in one big stroke, it will take many many years and many many new government policies. However, at the abre minimum, this new saving scheme at least tires to introduce the whole concept of "saving" for a new generation.... whether it will work, well that is another question all-together :)

Sense - My two Cents

| | 2008-05-31 23:17:47

I think the scheme is a great idea but as many have pointed out it does have some major flaws.

* 4 year minimum time frame
* Gets rolled into SUPER
* Contributions come from post tax then is taxed again
* Is open to property speculators
* Only have to live in property for 6 months (open to abuse by speculators)
* Is open to being grabbed in lawsuits
* Is capped
* Tax incentive to save only makes sense for high income earners

I don't see this scheme making much difference to housing affordability. If the government were serious about helping Aussies into their own home they'd

* Crack down on what is at best a cozy little arrangement all levels of government have with developers. At worst it's a corrupt relationship
* Re-regulate the finance sector and enforce the tried and true 3.5 x income limit
* release land to First time buyers at cost (not for profit)
* level the playing field between investors and owner occupiers by either granting OO's the right to claim interest against t...

Trevor McDonald - Mr

| | 2008-06-08 08:08:44

I think you make the most sense, although i do think that it would be far simpler and have more impact if the first home deposit was tax free.

cj	\| \| 2008-06-08 08:17:04

why isn't the minimum $5000 savings tax free and 100% tax deductible?

Nat	\| \| 2008-06-06 01:21:59

I agree its a step in the right direction for first home buyers. However, I dont like the 4 year minimum idea or that our savings are taxed twice!

Ed	\| \| 2008-06-10 02:31:58

At first glance, this scheme looked good, and I would have opened such an account but having read the conditions, I won't as it has too much potential to leave me in a worse financial position than if I didn't use it. For me, the most significant flaws are that I won't be able to access my money before the four year minimum, and that it will go into super if I bought with other savings.

It also doesn't make sense to impose an limit on total individual contributions. If I were to buy a house on my own, it would be no less expensive than if I a couple were to buy, but my savings in this type of account would have been limited to $75000, whereas the couple could have saved $150000.

I also can't see why I shouldn't be penalised if I don't want to live in my first home. Buying as an investment could give me the same security, but I won't be able to afford to buy near where I work. It would make sense for me to buy further from the city, and rent closer in (less petrol, more time, less pol...

DickD

| | 2008-06-16 08:23:09

This whole 4 year committment thing is ridiculous....personal circumstances can change in 4 years (a number of respondants have already given relevant examples). I don't see why your money should be forced into a super fund if you don't go through with the full 4 years.

If the whole concept is to force savings, or improve savings habbits, why not simply have a normal savings account without any strings attached. Then...to receive the governmet 17%, you should just be able to show that its been there for 4 years. If you can't satisfy this requirement, at least you still have your money,are receiving bank interest and you can do what you want with it.

Forcing the money into super would be a major disincentive for the majority of Australians.

Ultimately, it should be up to the individual to save. If they don't have the responsibility to save on their own without the government forcing them, then after the 4 years, when they do get the money and buy a place, can they be trusted to...

Katie

| | 2008-06-18 18:13:48

Maybe the government should think more deeply into what type of housing they should be encouraging people to save for. As a south east Qld resident, all I hear about is the shortage of housing in our area. Yet, people keep borrowing money from banks to build concrete monsterosities with massive environmental impacts to the surrounding land. The government should be encouraging more eco friendly housing to be built and rewarding those people (with extra schemes and suppliments) who choose to head in that direction.
By the way, capping the solar panel scheme left a bitter taste for me with the Rudd Government.
Does no one realise that if we keep wiping out trees, building massive houses and estates, and building our houses with non renuable energy sources, in a few decades time there will be no clean air for us to breath in our suburbs?
Come on everyone, wake up and start thinking about the planet we live on, rather than the selfish thoughts of your 'dream' home! We have a beautiful...

Melissa

| | 2008-06-18 20:53:03

Kylee

| | 2008-07-13 01:39:58

I LOVE TO BUILD HOME THAT IS ENVIROMENTAL BUT WE CAN NOT AFFORD TO DEPOSIT 1000 IN THIS STUPID SAVERS ACCOUNT i THINK IT WONT WORK. bUT IF I COULD SAVE, MY FIRST HOUSE WOULD BE ENVIRONMENTAL SO WE CAN SAVE MORE ADN INSTEAD OF PAYING MORE

Kristy

| | 2008-06-23 07:18:30

It seems a common theme - There should not be a four year requirement, nor should unused funds be deposited to super. Why can't this account be opened at my current bank I use?
I think it is great saving is being encouraged but why can't we just prove this is being done from current savings and gain rewards/assistance this way? We pay tax on eveything else in life?

maria barreras - mrs

| | 2008-06-28 06:45:39

I thought first home buyers can make contributions to the first home buyer saver account from the pre-tax income which is similar to super in structure? please advise

nhay	\| \| 2008-06-30 08:27:44

i was excited when i first saw an article about this in our community newspaper just yesterday. however, four years is too long, this program is basically useless for those who are planning to buy their first homes this year or the next - like me. why only benefit those who will start their good saving habits now? what about us who have saved years before this and are now ready to buy our first home?

mike H - first home saver - four years?

| | 2008-07-01 09:59:36

Lots of people are talking about the 4 year aspect for the new first home saver accounts. Just for the first 4 yrs of the scheme couldn't the government let people who already have savings, put that into a first home saver account and withdraw it earlier? Like the transitional arrangements for superannuation rule changes? That'd help get more people saving to buy their first home and make this idea a winner.

katie

| | 2008-07-02 01:52:23

So this scheme will allow us to afford a deposit... we still have to pay off the rest of the loan, and with house prices at ridiculously high levels this is just too little. An extra $15 000 or so will not help people to buy first homes in Sydney. If anything it will get people into a loan they can

John - salary sacrifice contribution

| | 2008-07-03 02:00:03

FHSA is gradually losing its attraction. The reason is simply like that most of fund operators are losing money for last half-year. Government contribution is not enough to overweight the bad performance of management fund. If the net return rate is less than after-tax bank interest rate, why first home savers put their money into heavy-regulated fund, rather than term deposit in bank?

Kwasik - salary sacrifice

| | 2008-07-14 08:01:23

Exciting plan. can contributions be used in salary sacrifice scheme.

Thank you

Matthew Bird - Mr

| | 2008-07-16 03:23:15

Your survey does not include a comments section... do you really want to hear from us or do you want a bunch of numbers. The scheme has the right idea, although taxing it at 15 cents in the dollar actually means I will pay more tax rather then less, not very well designed in this regard.

Disappointed - May as well use a normal savin

| | 2008-07-16 10:32:28

This is a good example of someone taking a worthwhile idea and turning it into something pointless. Even if I put the maximum $75k into this account the benefit would be more than eaten up by inflation costs after 4 years. I would be better off using a normal savings account and withdrawing after 2 years!

Graham Barber

| | 2008-07-30 20:27:41

The four year time frame for withdrawals discriminates against those people who have been doing the right thing and saving and are ready to buy in the next few years. The government should be doing more to make houses more affordable like making state governments abolish stamp duty for owner occupiers (was this not suppossed to go with the introduction of the GST?). I know there is a first home owners concession in NSW but it is only up to $500k then phased out. Not too many houses in Sydney under half a million these days....

Fiona Tucker - 4 year minimum for withdrawal

| | 2008-07-30 21:14:14

I also find the 4 year mimimum for this account to be too long. I would like to purchase a house within the next 2 to 3 which would make this account useless to me and many other australians as mentioned in the above comments.

The fact that your forcing people to put their saved money into supperannuation if they choose to purchase a home before the 4 year is rediculous that money should be used for what it was intended that being to purchase a first home. The guidelines to this account dissapoint me as Familys are struggling to save money for a house deposit while paying rent as it is.

Andrew - If your ready to Buy within 4

| | 2008-07-31 21:36:54

I WILL WAIT WITH GREAT ANTICIPATION ABOUT THE DECISION SURROUNDING INDIVIDUALS WHO MAY WISH TO BUY WITHIN 4YEARS. IF IT DOES NOT DISADVANTAGE THESE INDIVIDUALS, I BELIEVE THE IS A LOW RISK WAY OF SAVING A DEPOSIT FAIRLY AGGRESSIVELY.

Devils advocate

| |