First Home Saver Accounts
A first home saver account (FHSA) is a special purpose account designed to help people save for their first home. Once a year, the government will make a lump-sum contribution to the FHSA, based on the amount deposited into the account during that year.
The Australian Government has abolished the first home saver accounts (FHSA) scheme and these accounts are now treated like any ordinary account.
If you have an existing First Home Saver Account, don’t miss out on any government contributions you may be eligible to claim – you have until 30 June 2017 to lodge your claim.
From 1 July 2015:
- You can use the balance of your account for any purpose
- Tax concessions cease
- Your account is included in any income and assets tests that apply to government benefits, including the family tax benefit
- You need to report interest from your account in your tax return (starting with interest earned in the 2015–16 financial year)
Up to 30 June 2015, earnings on FHSAs were taxed at 15% and paid by the account provider. As an account holder, you didn’t have to declare FHSA earnings in your tax return. From 1 July 2015, FHSA’s will become an ordinary account. You will need to include your earnings in your tax return and pay tax at your marginal rate.
Outstanding government contributions
If you’re entitled to a government contribution for a period up to 30 June 2014 that we haven’t paid yet, we’ll still pay it to you (you have until 30 June 2017 to make a claim).
If your account is closed, you should complete a Government contribution destination nomination form to tell us where to pay any outstanding amounts. If you don’t complete this form, we’ll mail you a cheque.
How and when the government contribution is paid
Before the government contribution can be paid two things must happen:
- You must lodge a tax return – or, if you don’t need to lodge a tax return, lodge an FHSA notification of eligibility form.
- Your account provider must lodge an activity report with us by 31 October each year.
If you think you were entitled to a government contribution but haven’t got one, check that you’ve met the requirements above before you contact us.
Once we have that information, we have 60 days to calculate and pay the 17% government contribution. This means that many people don’t receive their government contributions until January in the following year.
Maximum annual government contributions
There’s a limit on how much the government contributes – this is called the maximum annual government contribution.
The table below shows you how you needed to contribute in order to receive the maximum government contribution. You could deposit more but you won’t receive more than the maximum annual government contribution.
The ATO continues to have responsibility to ensure the integrity of the scheme while it was active.
SEE ALSO: Budget 2014-15 – Budget Paper No.2 (PDF 3.0MB) – page 216