February 26th 2010 First Home Saver Account Explained
The federal government has lately launched The First Home Saver Account, also known as FHSA, to help all those people who are looking for their first homes . It has also given some charity to FHSA and the interest that gathers on this account is generally taxed at lower rates. It is a great opportunity for people who want to buy their home for the first time where the buyer has to save deposit by this effective and tax saving account. Thus, FHSA has assured to be quite beneficial for first home buyers. This program was launched in the year 2007 by Prime Minister Rudd as a simple tax saving program. It gives governmental aid to encourage people to start saving for their first homes in Australia. With first home save account you can save a good amount of cash. You can instantly deposit your money and you are obliged to keep the savings in your account for minimum four years. You need to maintain a balance of amount $75,000. Till you reach this amount, you have to save and invest your money in your account. You get great Government contributions once your account reaches this balance. You are not allowed to do any part withdrawal from this account and if you withdraw the balance, your account is closed. The users of First Home Savers Account can enjoy tax benefits as the government will contribute 17% of every $5000 that you save as an index amount. Also, the income tax is generally charged more than 15%, but for FHSA earnings, the tax rate is of 15% only. Also, the asset tests for this account is not required. But, you can manage this account till you purchase your home in Australia or until you become 65 years old.