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Proposed changes to First Home Saver Accounts (FHSAs) were announced this week by deputy Prime Minister and Treasurer. The proposed changes came about through the need to make FHSAs more appealing and flexible for Australians saving for a property.

Under current legislation a First Home Saver Account holder is required to keep their savings in the account for a minimum of 4 years before they can withdraw their savings to purchase a home.

If an account holder purchases a home before the 4 years is up, the balance of their savings must be transferred into their superannuation account so that it remains in a concessionally taxed environment.

Under the proposed legislation, the account holder will be able to purchase their first home at any time. The 4 year period to release the funds will remain, however once it is up the balance can be paid into an approved mortgage rather than their super account.

Consultation on the draft legislation closes on 4 November.