International Law

First Home Saver Account changes

By David Jacobson

The Assistant Treasurer and Minister for Financial Services and Superannuation has released for public consultation an exposure draft of regulations which make amendments to the disclosure requirements for First Home Saver Accounts (FHSAs) in the Corporations Regulations 2001 as a result of proposed tax changes to FHSAs.

Currently a FHSA holder would need to keep their savings in a First Home Saver Account for four financial years before they are able to use those savings to buy a home. Under the existing legislation, if the account holder buys a home prior to meeting the minimum release conditions, the balance of their FHSA must be transferred to their superannuation so that it remains in a concessionally taxed environment.

The proposed Tax Laws Amendment (2011 Measures No. 1) Bill 2011 will amend the operation of FHSAs by allowing savings in a FHSA to be paid into an approved mortgage after the end of a minimum qualifying period, rather than requiring it to be paid to a superannuation account, if a home is purchased prior to the minimum release conditions being met. The new rules will apply to houses purchased after the Tax Bill receives Royal Assent.

Full post as published by Australian Regulatory Compliance Review on February 16, 2011 (boomark / email).