A big hurdle for First Home Buyers that has prevented them from entering the market has been helped by the Federal Governments introduction on the 1st of July 2017, of the First Home Super Scheme (FHSS)
The FHSS scheme allows first home buyers to make additional voluntary contributions to their super, through pre-tax salary sacrificing or post-tax contributions, up to $15,000 per year, capped at $30,000. These are additional contributions above the compulsory 9.5% employer superannuation guarantee.
Contributions must be in addition to the Superannuation Guarantee contributions made by your employer which continue to be preserved until retirement age.
The scheme can only apply to the purchase of a property you are currently living in or intend to live in as soon as practicable and you must live in the property for a minimum of 6 months of the first 12 months you own it, from the day you move in.
Super Saver scheme applies to all Australian who are seeking to purchase their First Home.
Voluntary contributions are taxed at a lower rate compared to income, allowing first-home buyers keep more of their money and save faster. Applicants are also entitled to access any earnings on their extra contributions.
TIP FHSS applies to each individual, allowing both spouses or partners to make equal contributions and expedite the saving of a deposit.
First Home Buyers can use this scheme if both of the following apply:
- You either live in the premises you are buying or intend to as soon as practicable; and
- You intend to live in the property for at least six months within the first 12 months you own it, after it is practical to move in.
If you plan to use the scheme, there are several important factors to consider:
- You must apply for and receive a FHSS determination from the Tax Office before signing a contract on your first home or making the application to release your FHSS savings;
- Once a valid request has been made, you can sign a contract to either purchase or build your home;
- You can only apply to release your FHSS savings once; and
- Once you make a valid request for release of your FHSS savings, you have 12 months to sign a contract or build a new home.
The information provided is a simple guide to give you some background. For detailed accurate information, on the First Home Super Save Scheme follow this link, directly to the ATO website. https://www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/first-home-super-saver-scheme/