Does anyone know about the new First time Savers account?

[Guest Alipally]

I've been hearing adverts on the crappy radio about how the Aussie Government will pay an addition 17% into your savings for buying your first Aussie home...

 

Does anyone know anything else about it?

I'm gonna phone the 1300 number and see if I can take advantage before we buy our first home!!

 

Ali

[Rachiegarlo]

the government will match your payments with 17% upto a max of you depositing $5000 into the special 1st timers account.

[Andrew from Vista Financial]

This seems like a very good incentive for people who are looking to buy as it offers the co-contribution as Rachie say's, the $5,000 is indexed annually, it also has advantageous tax treatment similar to Superannuation.

 

However it seems to be aimed at people not looking to buy for a least 4 years!

 

This is what you need to do:

 

 

■ Make personal contributions of at least $1,000 for each

 

of four financial years (not necessarily consecutive years)

before you can withdraw your money.

 

 

 

■ Contribute as little or as much as you like every year, up

 

 

 

 

to a maximum cap over the life of the account. The cap

is $75,000 for the 2008–09 financial year and will be

 

 

indexed over time.

 

If you take it out without meeting this criteria than penalties and taxes apply. (Not sure exactly what they would be but probably equal to the co contributions and tax advantages you've already received).

 

It can also be rolled in to Super at any time without penalties, so it could be used as an effective retirement planning strategy for some people, (seek advice if you want to know how)

 

Not many providers offering them at the moment though, I have seen AMP and Commonwealth Bank on the list.

 

 

Andy

[Guest Alipally]

Yeah, I read the 4 year thing and wondered if I'd understood, correctly... so not much good if we're looking to buy in around 6 months then!

 

Ali

[Andrew from Vista Financial]

No, thought the government might change this in the time they announced it some months back and launching it!