The First Home Savings Scheme formed part of the recently released Federal Government's first budget. The scheme offers a savings account for people intending to buy their first home. Generally, the accounts attract an interest rate of 17% and a reduced tax rate of 15%. The accounts are capped at $75,000 ($10,000 less than expected).
There are many conditions associated with the accounts, including a means test on income (starts at $80,000), minimum occupancy period (six months) and minimum deposits of $1,000 p.a., as well as other withdrawal limitations and minimum saving requirements. Penalties apply for people who fail to comply with these conditions. For more detail on the scheme, read the Fact Sheet on The Treasury's website.
There are many conditions associated with the accounts, including a means test on income (starts at $80,000), minimum occupancy period (six months) and minimum deposits of $1,000 p.a., as well as other withdrawal limitations and minimum saving requirements. Penalties apply for people who fail to comply with these conditions. For more detail on the scheme, read the Fact Sheet on The Treasury's website.
Although released in the budget, the banks' peak body is expecting that financial product offerings won't appear until October.
Australian Bankers' Association chief executive David Bell said while the changes to the scheme, released in the Budget, would simplify the product for suppliers and first-home savers, banks had the final say on when any accounts would be launched.
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