First Home Super Saver Scheme
Thinking of buying your first home? How exciting! Except for the part where you have to scrape together the deposit, lenders mortgage insurance, stamp duty and upfront mortgage fees… The Federal Budget 2017–18 introduced the First Home Super Saver Scheme(FHSS) which may provide some relief!
What is the FHSS?
FHSS is all about saving money for your very first home inside your superannuation fund. This allows you to save money with the benefit of receiving concessional tax treatment within super. This should allow you to save a little faster. In today’s rapidly changing markets, speeding things up a notch might well make a difference when competing against the possible value increase of the properties in your price range.
How does is work?
With the FHSS you can make voluntary contributions of up to $15,000 a year or up to $30,000 in total. These contributions will be taxed at concessional rates and can then be withdrawn for a deposit. As only voluntary contributions will count towards your FHSS, your mandatory employer superannuation guarantee contributions is not included.
The first FHSS savers will be able to withdraw their voluntary superannuation contributions from 1 July 2018. The FHSS withdrawal can be used to buy a new or established residential property. Or even vacant land if you are planning to build. However, you will need to either live or intend to live in the property as soon as practicable and will have to do so for at least 6 months of the first 12 months you own it. (No new or separate super account will be required. You will be able to contribute to almost any super fund and even into more than one fund at the time. But always double check this with your nominated super fund before you commence. And while you’re at it, ask them about fees, charges and insurance implications that may apply.)
Is this for me?
To be eligible for FHSS you must have not previously owned property in Australia or released FHSS funds and be 18 years or over.
Couples can make extra super contributions individually and then withdraw the funds later to roll them into the one home loan deposit.
Try the online FHSS Estimator to help you estimate how much better off you will be using the FHSS.
More info can be found on the ATO website here.
What if I’m not eligible?
If FHSS is not available for you and you are struggling with the minimum deposit, speaking to a broker can help. Here at Home Loan Depot, we can help you understand what are the best options for you. Contact us today, call us on 1300 967 120 or email us at info@homeloandepot.com.au.
