What exactly is the First Home Super Saver Scheme? On basic terms, it is a Government program which allows you to make voluntary contributions to your super to save up for your first home. You can contribute a total of $30,000 towards your super but only $15,000 in any one financial year.
What are the requirements?
- Funds can only be used if all buyers are buying their first home and must intend to live in the property for at least six months of the first twelve months you own it
- Ineligible properties are: a houseboat, a motor home and vacant land
- Contributions can be made at any age but you must be 18 years or older to access
- You must have received released amounts from the FHSS first before signing a contract to purchase or construct property
- Can only withdraw after 1 July 2018
What are the benefits?
- Pre-tax contributions made to super are taxed at a lower rate compared to your income paid to your bank account
- You can withdraw up to a maximum of $30,000 in voluntary contributions ($60,000 for a couple) plus whatever interest earned on those contributions
- You have 12 months after funds are released to sign a contract to purchase or to construct
What are the cons?
- You are taxed on earning the money and also on withdrawing the funds from Super
- You can only withdraw FHSS once
- Your super balance decreases
- Only voluntary contributions can be withdrawn: the contributions your employer makes cannot be withdrawn
If you or any clients need assistance understanding more about the Super Scheme, please get in touch with us!