The Commonwealth Bank of Australia (CBA), ANZ and AMP will be among the first major financial services companies to offer the First Home Savers Account (FHSA), from the beginning of next month.
The FHSA is a simple, tax-effective way for those aged 18 to 65 to save for their first home, through a combination of Government contributions and low taxes, CBA retail products executive general manager Michael Cant said.
“The accounts will only attract 15 per cent tax on earnings, withdrawals will be tax free and the Federal Government will contribute 17 per cent on the first $5000 of individual contributions made each year,” AMP banking managing director Michael Lawrence said.
The financial services groups will provide further incentive for first homebuyers by offering a variable interest rate on savings.
CBA will offer 6.5 per cent, ANZ’s rate will be 7 per cent, and AMP’s will be 8 per cent.
The FHSA will be available through banks, building societies, credit unions, life insurers and also some superannuation entities.
Account holders must contribute at least $1000 per year over four years before funds can be withdrawn to purchase a first home.
There will be a limit of $75,000 on the overall FHSA balance and once this cap is reached, no further individual contributions can be made.
