Newspaper article Gympie Times, The Qld.

Home Savers Useful Tool

Newspaper article Gympie Times, The Qld.

Home Savers Useful Tool

Article excerpt

Noel whittaker

columnist

FIRST Home Saver accounts are a useful tool for young people who expect to buy their first home within five years.

They enable young people to boost their house deposit because the government is contributing 17% on the first $6000 of funds deposited each year until the balance reaches $90,000, at which point no further contributions can be made. This is equivalent to a capital guaranteed tax free return of 17% a annum on top of the interest that will be paid by the bank.

A further benefit is that interest on these accounts will be taxed at just 15%, the same as superannuation. If a first home saver in the 30% tax bracket deposited $5000, and received $250 interest for the financial year, tax would take just $37.50, leaving them with $212.50 in addition to their $850 from the government. This is a total after tax return of 21.25%.

The problem is that most banks have turned their backs on the scheme and it can be difficult to find anybody offering these accounts. …

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