Government introduces tax cuts for first home savers
Monday February 25, 2008
People saving to buy their first home will get a tax benefit from the Federal Government worth approximately $850 million over the next four years. The new scheme will be introduced on 1 July 2008 and will apply only to people saving for their first home tax concessions.
The new savings scheme will give people on a standard 30% tax rate or less, a Government contribution of $750 for every $5,000 saved during a given year. The Government contributions will also apply to higher income earners but people will have to save for a minimum of 5 years to be eligible for the scheme.
The first home saver accounts were an election promise from the Rudd Government before the last election and will help young people who are planning to buy a house in the long term. The scheme is not only designed to help young people realise the dream of buying their own home but will also help to keep inflation down with the Federal Government anticipating the scheme will help people save an additional 4 billion in the next four years.
The initial policy announced by Labour before the election has been amended on the advice of Treasury. The Treasurer Mr Swan said the initial scheme would have been more like a superannuation account but had been adjusted to make it easier for low-income earners. Also instead of the money going through a sacrifice salary scheme it will go directly into people's savings accounts.
- More information on the first home owners grant
- Apply for a home loan