First Home Super Saver Scheme

Help to buy your first home

The First Home Super Saver Scheme (FHSS) was introduced to reduce the pressure on affordable housing.  Access to this scheme applies from 1 July 2018.

From 1 July 2017 concessional and non-concessional contributions you make to your super fund can be applied to be released to help you purchase your first home.  Release requests can only be made after 1 July 2018.

Concessional/before tax contributions include salary sacrifice amounts, contributions by your employer and any other contribution you have claimed a tax deduction for.  Non concessional/after tax contributions are contributions you voluntarily make from your after tax dollars.

To be eligible:

  • applicants must be over 18 years of age
  • you must not have owned any property in Australia previously
  • you must not have used the FHSS already
  • intend to live in the property you wish to purchase as soon as practical after purchase
  • intend to live in the property for at least 6 months in the first year of owning the property

And no, don’t think about using the release funds to purchase a house boat, a motor home, vacant land or any other type of premises not capable of being occupied as a residence.

How much can you release from your super?

Eligible individuals can apply to release 100% of non concessional contributions and up to 85% of concessional contributions but are limited to a maximum of up to $15,000 in one financial year.  The maximum that can be released is $30,000 in total across more than one financial year.

Will there be tax?

Of course there will be tax!  The ATO will work out the tax to withhold from your released funds at your estimated marginal tax rate less a 30% tax offset or at 17% tax.

And yes, the released funds are also included in your taxable income in the year you request the release.  But the amount won’t affect any family tax benefit calculations for that same year.

If your request to release the funds is granted, there is a 12 month time limit to sign a purchase or construction contract.  Although it is possible to request an extension, if not granted, you can be requested to recontribute the release amount back to your super fund or pay further tax on the release amounts.

Please note the above is factual information only.  If you would like advice concerning the FHSS and your personal situation please contact us.  One of our authorised representatives would love to help you out.

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