Home > Accounts > Savings and term deposits > Frequently asked questions - First Home Saver Account
Frequently asked questions - First Home Saver Account
Who can have a First Home Saver Account (FHSA)? Is a FHSA right for me? Can I open a joint account? How can I use the money in my FHSA? How do I save with a FHSA? How does the Government help me save? How does Teachers Mutual Bank help me save? What if my situation changes? What if I’m having trouble saving? What if I move overseas? Can I live in a home I already own? What if I experience financial hardship? How can I withdraw my savings? How long do I need to live in my first home? To open an account, you must:
- be aged 18 or over and under 65
- have a tax file number (this is a requirement – if you do not wish to lodge a TFN, you cannot hold an FHSA)
- have never owned a home in Australia that you have lived in, and
- have never opened a FHSA previously
You should consider opening a FHSA if you:
- only want to use your funds to buy or build your first home in Australia to live in, and
- be able to save at least $1,000 a year in four separate financial years.
No – FHSAs are only able to be opened in individual names for couples:
- each person must open their own individual FHSA
- each person can then receive the benefits of having a FHSA
The money in your FHSA can be used to:
- buy your first home
- be added to your superannuation
- be withdrawn as a lump sum if you’re aged 60 or over
- Deposits can be made into a FHSA in same way you’d deposit to a savings account. This can be done at any time, and for as long as is needed to save the deposit.
- Salary sacrifice is not permitted
- Money is not required to be deposited every year, but the Government contribution will only be allocated in years funds are deposited
- Once the total amount reaches $90,000 – including Government contributions and income from investment earnings – no further funds can be deposited to the account
- The account can be maintained until your first home is bought, or until you turn 65
- When you reach the age of 65, the account must be closed and the funds withdrawn or moved to superannuation
- When $1 is deposited to the account, the Government will contribute 17 cents
- Any money deposited up to a total of $6,000 in a financial year will receive the Government contribution. Anything over this limit will not e.g. If $6,000 is deposited in one financial year, the Government will contribute $1,020 to the account.
- Government contributions are paid directly into your FHSA after you lodge your tax return and the provider has advised the Australian Taxation Office how much you have contributed
- You are not taxed on the money deposited to your account, on the Government contributions or when you withdraw your savings for your home
- The income earned on the savings is taxed at 15%
- by applying a competitive variable interest rate
- by crediting interest monthly
- by debiting the 15% tax on interest earnings directly from the account
If you decide not to purchase your first home, you can:
- move your savings into superannuation or
- withdraw the savings as a lump sum if you are aged 60 or over
If you want to buy your first home before you have deposited $1,000 into your account in 4 separate financial years:
- you cannot use the savings in your account if you are buying the first home on your own
- you can use the savings in your account if you are buying your first home with someone else who has met the criteria
If you have opened a FHSA and started saving, but find yourself in a position where you do not have any money to deposit into the account, you can choose to:
- start saving again when you have funds available
- move your savings into superannuation
- withdraw your savings as a lump sum if you are aged 60 or over
If you haven’t deposited $1,000 into your account in 4 separate financial years and want to close your account, you can choose to:
- move your savings into superannuation or
- withdraw the savings as a lump sum if you are aged 60 or over
You can keep your account open, and continue to deposit money in to the account, but you won’t receive any Government contributions if you are overseas for an entire financial year
If you start living in a home you own (previous investment property) you are no longer eligible to have an account. You must advise Teachers Mutual Bank and close your account within 30 days or have penalties imposed. When you close your account you can either:
- move your savings into superannuation or
- withdraw the savings as a lump sum if you are aged 60 or over
If you experience hardship, you can:
- move your savings into superannuation, and
- after moving your savings, you may apply to access the superannuation under the early release provisions. These include severe financial hardship, permanent disability or on specified compassionate grounds.
- Savings can only be withdrawn after depositing a minimum of $1,000 a year into the account in 4 separate financial years.
- If you are buying your first home with other people that have a FHSA, the savings can be withdrawn from each account if just one person has deposited the $1,000 in their account in 4 separate financial years.
- When you are ready to use your savings apply to Teachers Mutual Bank to withdraw your funds and close your account
- you must live in your first home for at least 6 months within 12 months of settlement, or
- on completion of building construction