If you're a first home buyer, the Federal Government will help to add extra dollars to your savings when you set up a first home savers account. Each year the government will make a 17% contribution on amounts you deposit, up to $5,500 per year. This means if you deposit $5,500 in one financial year, you will receive $935 from the government. Some of the main features of these accounts are:
- You have to save at least $1,000 each year over at least 4 financial years before you can withdraw the money. These 4 years do not need to be consecutive.
- The maximum account balance is capped at $80,000 but this cap will be indexed in future years. After your savings reach this level, only interest and earnings can be added to the balance.
- The money has to be used for your first home. If it is not, it is added to your super and you can't access it until you are retired or can meet another condition of release.
- If you buy your first home before the 4 year period is up, you can withdraw the money in your account at the end of the 4 year period to put towards your mortgage.
We've created a First Home Savings Calculator to show how you can build a healthy deposit using one of these accounts.