The Money Web

Saving for your first home is a big challenge for many young Australians. Sometimes it can seem like owning a home is never going to happen as house prices keep rising as you try to scrape together enough for a deposit.

Now is a better time than ever for first home savings. House prices have stabilised due to the economic turn down which means you probably have some time on your hands to save for a deposit before house prices take off again.

On top of this the federal government on October 1st launched a new fist home savings scheme called, First Home Saver Accounts.

First Home Saver Accounts Explained

First Home Saver Accounts are high interest savings account for the sole purpose of saving for a deposit on your first home.

• Available from a number of banks including ANZ, Commonwealth, Suncorp and Members Equity.
• You can contribute your post-tax earnings into the account and you pay no tax on the income earned from interest on the account.
• The government will add 17% to your contributions at the end of each year (after you submit tax return) up to a value of $850 per year.
• Money may only be withdrawn for use on a house deposit by first time home buyers
• The scheme is in addition to the government first home owner grant scheme, it is not a replacement.

How much could I save?

According to ANZ you would have a balance of roughly $27,000 after four years if you saved just $100 per week on an account earning 5% interest per year. This is accounting for a 17% per year additional contribution from the government.

How Do I Get One?

You don’t apply via the government. You simply apply via any of the banks offering First Home Saver Accounts such as Commonwealth or Members Equity. Check the sponsored links for accounts currently on offer.

First home savings products are obviously only for first home buyers. You also need to be aged 18 or over, meet minimum annual deposit requirements and be a permanent Australian resident or citizen to qualify.