First Home Super Saver Scheme
First home buyers, meet your new best friend…
In the 2017-2018 Federal Budget, the government introduced a new scheme call the First Home Super Save Scheme (FHSSS).
The First Home Super Saver Scheme can be used by first home buyers to save money inside their super fund to help buy their first home. This scheme can be used to purchase a new or existing home in Australia.
How does the FHSSS work & how much can you contribute?
The First Home Super Save Scheme allows you to make voluntary contributions to your super find, which you can the withdraw at the tim eyou are going to purchase your first home.
A individual can voluntarily contribute up to $15,000 per year, or if you are a couple, then this can obviously increase to $30,000 per couple and you can release up to $50,000 from each superfund, totaling to potentially a joint deposit of $100,000.
Please keep in mind, these contributions available for withdrawal DO NOT include compulsory superannuation contributions made by your employer.
Who can access this scheme?
You must be 18 years or older to withdraw amounts under the scheme, but you make eligible contributions before then.
You must have never previously owned property (including an investment property, vacant land, commercial property, a lease of land, or company title interest in land) and not used the FHSSS before.
As the scheme is assessed on an individual basis, couples, siblings, or friends can each use their own FHSSS contributions to purchase the same property if they are first home buyers. A couple could therefore each access their $50,000 in savings for a combined $100,000 deposit.
So… how does this save me tax?
These voluntary contributions are treated as a tax deduction in your person tax return. If you chose to contribute for example, $10,000 in one year, the you would be able to reduce you taxable income by this amount and save tax at your marginal tax rate. You will need to contact your superfund and complete a ‘notice of intent to claim tax deduction’ form.
You will need to contact your nominated superfund to check they will release the money under the scheme. They will be able to point you in the right direction with payment details for you to make these voluntary contributions.
When your savings amount are released from your superfund, the ATO will withhold some tax from your deposit (normally your marginal tax rate, less a 30% offset). When you lodge your tax return, the actual tax payable is recalculated and may differ from the amount of tax already withheld.
When can I withdraw my savings?
You must have a FHSSS determination before you sign a contract to purchase any property.
To request the determination, log into ATO online services via myGov, go to the super tab and from the drop-down menu select Manage and then First Home Saver. The ATO will tell you your maximum FHSSS amount when you apply for the determination.
Once you have received the determination, you can apply via myGov again for a release of the amount specified in your FHSSS determination. Once your savings amounts have been release, you have up to 12 months from the date you requested the release of the FHSSS savings to sign a contract to purchase or construct a home.
For more information, please head to the ATO website or reach out to us!