First Home Super Saver Scheme

The first home Super Saver Scheme can be accessed by first home buyers and allows you to save money inside your super fund. To find out more information listen in as Kirsty and Georgie discuss.

What is the First Home Super Save Scheme?

The First Home Super Save Scheme (FHSSS) aids Australians over the age of 18, in building a deposit for their first home. You build your deposit inside of your superannuation with the benefit of a tax cut.

 

What are the tax benefits?

Superannuation pre-tax contributions are taxed at a rate of 15%; outside superannuation savings are taxed at your marginal rate, which can reach 48.5%.
Superannuation shields after-tax contributions from further taxation because they have already been taxed outside of it.

 

How does the Scheme work?

First home savers are able to add additional funds to their superannuation accounts, this can be up to $15,000 per financial year. You are then able to withdraw that money as a deposit on your first home. $50,000 is the maximum amount you can withdraw and contribute to the FHSS over years to use as the deposit on the first home you purchase.

 

What are the limitations to look out for:

You can request a determination (or estimate of available funds minus tax) as many times as you like, but you can only withdraw your funds once, and they need to be put toward your purchase within twelve months of requesting them to be released.

You do have the option to extend this by a further twelve months, which is mostly in the cases of construction, but after that time you have to decide if you want to keep the cash or return it to your super.
If you keep the cash, there will be a flat rate of tax payable on it of 20% of the released amount, and if you choose to put it back into your super, you cannot withdraw it again.

You also cannot buy just vacant land using these funds with no intention to build on it (unless you’re willing to take the bill for the 20% taxation) – unfortunately it’s the name of the game, being the First Home Super Saver Scheme, this is geared toward either purchasing an established property or building a brand new one.

If you’ve already bought land but want to release your super to do a build, unfortunately you’re also not able to do this as you will have technically owned real estate already and are considered ineligible for the scheme even if you’ve made contributions!

You also can’t use the funds to purchase an investment property, just like the other First Home Guarantee initiatives- you do have to intend to occupy the property as soon as its able to be occupied, and live in for at least 6 months.

 

A few helpful links:

For a handy link to read further about the Super Saver Scheme click here.

For a simple handout to read on Understanding the First Home Super Saver Scheme click here.

For a blog on how much we suggest to have as a deposit click here.

For an example of what you can expect your MyGov account to look like once you’ve started saving extra into your super click here.