13 May 2014
Media Release - #20140232, 2014

Abolishing the First Home Saver Accounts Scheme

As part of the release of the 2014-15 Budget, the Government is abolishing the First Home Saver Accounts scheme using a phased approach from Budget night.

The scheme is being abolished as it has had limited effectiveness in improving housing affordability due to the low take-up of accounts since their introduction by the former government in 2008. At December 2013, there were only 46,000 accounts open with a total combined balance of $521.5 million.

Any new accounts opened from Budget night will not be entitled to the existing Government co-contribution or any tax or social security concessions.

The Government will make regulations to ensure that anyone seeking to open a new account from Budget night is informed of these changes by the account provider. Existing account holders will continue to receive the Government co-contribution and all tax and social security concessions associated with these accounts for the 2013-14 income year.

The Government co-contribution will cease from 1 July 2014 and the tax and social security concessions associated with these accounts will be withdrawn from 1 July 2015. As of 1 July 2015, account holders will be able to withdraw their account balances without restriction. Once the First Home Saver Accounts scheme is abolished from 1 July 2015, these accounts will be treated like any other account held with a relevant provider.