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.

Eligibility criteria

To open a first home saver account, you must be an individual who:

  • is between 18 and 65 years old
  • has a tax file number you can quote in your application
  • has not have previously owned a home in Australia that has been your main residence
  • has not have previously had a first home saver account.

You can open an FHSA with an ordinary financial institution but you need to meet qualifying conditions before you can access the funds – you must meet the 'four-year rule'. Once you've accessed the money, you must use it for a deposit or for other costs associated with building or buying your first home. If you don't, you may be liable for the FHSA misuse tax.


FHSAs attract the following benefits:

  • receive government contributions every year deposits are made, equal to 17% of the deposits (up to a maximum for 2013-14 of 17% x $6,000 = $1,020).
  • interest is taxed at a flat rate of 15%
  • the account is not included in the income and assets tests that apply to various government benefits
  • interest does not have to be reported in your tax return
  • no tax is payable when money is withdrawn
  • you can contribute as little or as much as you like every year (but there is a limit of $95,000 for 2014-15 that you can have in the account).

Proposed changes

In the 2014-15 Budget, the Federal Government announced changes to abolish the first home saver accounts scheme. At the time of publication (October 2014), these changes had not become law.

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