First Home Saver Accounts to offer more flexibility

The federal government has released draft legislation aimed at increasing the flexibility of First Home Saver Accounts.

In a statement, treasurer Wayne Swan said the legislation followed through on the government's commitment to allow savings in a First Home Saver Account 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.

"This improvement to the scheme will allow account holders to purchase a home earlier than planned and still be able to put the money from their First Home Saver Account towards their new home, should their circumstances change," he added.

The move may tempt consumers looking to compare savings accounts ahead of a property purchase. At present, First Home Saver Account holders are required 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 scheme, the government contributes 17 per cent on the first $5,500 (indexed) of individual contributions made each year, among other benefits.

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