The First Home Super Saver scheme allows you to save money in your super for a deposit to purchase your first home. The scheme taps into super’s tax breaks to give your deposit a healthy boost.
As of 1 July 2017, the government introduced the FHSS scheme in order to reduce the pressure on housing affordability. The scheme allows you to make concessional and non-concessional contributions into your superannuation funds in order to save for a deposit on your first home.
Eligibility
- If you aged 18 years and over and have never previously owned your own home you can make voluntary contributions into your super fund (capped to $15,000 p.a. per financial year).
- live or intend to live in the premises you are buying a soon a practicable after purchasing your home (or live in for at least 6 months of the first 12 month period you own it
- can only use the scheme one (only one withdrawal from your super to be used for a deposit on your home
You can withdraw up to $30,000 for singles or $60,000 for couples from your super fund to utilise towards a deposit on YOUR very first home.
By utilising your super fund to save for your first home as opposed to a normal savings account will allow you to
- savings discipline: you are unable to touch funds once they are contributed in the fund until you are ready to buy your home
- savings on tax: as your super is tax at 15%, any interest earnings in a savings account is tax at your marginal tax rate e.g. up to 48.5%
- earning more: any money contributed towards your FHSS earns a higher interest rate on earnings than you would be earning in your savings account (4.95% vs 1.5% p.a.)
Important Things to Know
- Prior to signing a contract on your first home, you must apply and receive an FHSS determination from the ATO
- Home is located in Australia
- You are able to sign your contract on your first home from the date you make a valid request to release your FHSS amounts
- You can only apply for the release of FHSS amounts once
- It may take between 15-25 business days for you to receive your FHSS amounts
You can make concessional and non-concessional contributions into your super fund towards FHSS: See Super Contributions
If you would like assistance in implementing tax-effective strategies to prepare you for homeownership, speak to a professional or contact our office.