Brief Overview of features of FHSA
The following are the key features of these promising Home Saver Accounts:
- Eligibility Criteria
- Individuals applying for FHSA should be Australian residents
- Should be between 18 to 65 years of age
- Should not have any previous property in their name
- Initial personal contribution of $1,000 has to be made by the applying individual
- Have to provide a tax file number and also an identity proof
- Contributions and Withdrawals by Individuals
- For next four years, every year the individual has to make a contribution of minimum $1000 in these funds before trying for withdrawals of the balance from the account.
- Once the balance had been withdrawn within six months you have to utilize it in buying your first property. You will get full tax exemption on withdrawal amount if you use it for buying your first home.
- You cannot make partial withdrawal from this account and once the balance is withdrawn you have to close this account.
- Individuals can contribute a maximum of $10,000 annually into this account.
- Tax savings and Government Contribution
- FHSA account will benefits users by making them enjoy great tax savings, for example if you are able to save an index amount of $5000 government contribution will directly be added to your account. Government will be offering 17% contribution on the first $5000 deposit. The government contribution will depend upon the income tax bracket of the individuals and would be anywhere between 15 to 30%.
- FHSA account earnings are taxed at a rate of 15% and not same as the marginal income tax rate of individuals. Also, these accounts are free from any kind of social security asset tests.