First Home Saver Account
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3. How the Government helps you save
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The Government boosts your savings with contributions and a low rate of tax on the income your investment earns.
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When you put money into your account the Government puts money in too
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• When you put a dollar into your account, the Government will contribute 17 cents
• Any money you put in up to a total of $5,000 in a financial year will get this Government contribution – anything over this amount will not.
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For example, if you put $5,000 into your account in one financial year, the Government will contribute $850 to your savings.
If you are saving with other people that have their own First Home Saver Accounts, each person will receive Government contributions on the money they put into their account.
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• Government contributions are paid directly into your First Home Saver Account after you have lodged your tax return and bnext has told the Tax Office how much you have put in.
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You are not taxed
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• on the money you put into your account
• on the Government contributions, or
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• when you withdraw your savings for your first home.
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There is a low rate of tax on your investment earnings
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• Earnings on First Home Savers Accounts are taxed at 15% but this is paid to the Tax Office by the account provider.
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