In the 2014-15 Budget, the Federal Government announced the following changes to abolish the first home saver accounts scheme;
New accounts created in respect of applications made from 7.30pm, Tuesday 13 May 2014 will not be able to access any concessions or the government contribution.
Eligibility for a government contribution will cease from 1 July 2014. Existing account holders will continue to receive the government contribution for personal contributions made during the 2013-14 income year.
Tax and social security concessions will cease from 1 July 2015. Existing account holders will continue to receive all tax and social security concessions associated with these accounts for the 2013-14 and 2014-15 income years.
Restrictions on withdrawals will be removed from 1 July 2015.
Once the first home saver account scheme is abolished from 1 July 2015, these accounts will be treated like any other account held with a provider.
The existing rules will continue to apply until the law is changed.
As someone who opened a FHSA when they first arrived, I have benefited from 5 lots of co-contribution payments (with one more still expected later this year). I'm interested to see how we all walk away from these accounts. It seems black-and-white, that the balance will be transferred to a standard transaction account with no additional tax obligations. Quite unexpected that providers will not grandfather existing account holders, but a much better scenario than being locked into the account without the benefit of co-contributions.
Has anyone come across any fine print of interest for account holders?
Withdraw your money after your final payment