We talked about how it's good for two reasons:
- For every $100 you put into the account, the government puts in $17
- The tax payable on the interest earned in the account is capped at 15%
The downside to the scheme is the '4 Year Rule' - you need to make contributions of at least $1,000 in four different financial years before you could use the money to buy a house; and if you bought a house before then or changed your mind, the money would become locked up in your superannuation.
A friend of Prosple pointed out this recent change to the scheme which has relaxed the '4 Year Rule'. If you buy a house before you have completed all 4 years, you can now withdraw the money after the remaining years have elapsed to use toward mortgage repayments - meaning that it's not locked away in super until your retirement.
So is it a good idea now? If you are sure that you will one day want to buy a home in Australia, then it's hard to see how this is a bad idea (in fact, we're going to open one up right now).
Want another reason?
The 2010-11 Financial Year is coming to an end. If you open an account now and make at least a $1,000 contribution before the end of June, you will have already satisfied one year of the 4 year requirement, meaning there's only a 3 year wait until you can get your funds.
Are you going to open an First Home Savers Account? Let us know in the comments!