Newspaper article The Chronicle (Toowoomba, Australia)

Home Ownership Less Pie in the Sky

Newspaper article The Chronicle (Toowoomba, Australia)

Home Ownership Less Pie in the Sky

Article excerpt

IF you donat want to struggle to pay off a mortgage later in life, the best time to enter the property market is in your early to mid-20s.

Securing a house or apartment at a young age not only jump-starts your wealth portfolio, itas also a good savings strategy thanks to a government scheme that offers extra cash to those saving for a first home.

First home saver accounts (FHSAs) were launched in 2008.

Initially, the Federal Government forecast that 700,000 accounts would be opened, but the Australian Prudential Regulation Authority says just 38,500 FHSAs were operating last September.

When you open a first home saver account, the government pays a 17 per cent interest contribution on the first $6000 you deposit each year.

The financial institution operating the account also pays yearly interest of about three per cent, and the interest earned is taxed at 15% instead of at your marginal tax rate.

The scheme hasnat turned the world upside down because it is a forced savings plan. …

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