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Are you up to date with changes made to the First Home Super Saver (FHSS) scheme?
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Latest  /  Are you up to date with changes made to the First Home Super Saver (FHSS) scheme?

What is the First Home Super Saver (FHSS) scheme?

It appears as though the tide could be turning in more ways than one for the Queensland property market. With more evidence mounting that the market has somewhat bottomed out in a number of residential areas, interest rates at record-lows, more first home buyers are making their way out and about to snatch up their dream property while they can.

According to Australian Bureau of Statistics and Domain data, first home buyers are making their way back into the property market in droves as a number of areas become more affordable and lending restrictions become more relaxed, with Queenslanders leading the way. But, given the intense focus on Australia's housing markets, especially concerning first home buyers, it’s surprising that more prospective first home owners aren’t aware of all initiatives designed to help them get into the market.

With the perfect storm brewing for first home buyers at the moment, it’s more important than ever to get some guidance from a Queensland mortgage and loan expert.

What is the First Home Super Saver (FHSS) scheme?

The First Home Super Saver (FHSS) scheme was first implemented in the 2017/18 Federal Budget to allow first home buyers to save money for their first property within their superannuation fund. The goal of the First Home Super Saver (FHSS) scheme is to help you get to your deposit savings goal and into your dream property sooner.

How does the First Home Super Saver scheme work?

The FHSS scheme allows you to utilise up to $30,000 in voluntary concessional (before-tax) and voluntary non-concessional (after-tax) contributions to your super and withdraw it (plus earnings, less tax) to be used as the deposit towards buying your first home.

Am I eligible for the First Home Super Saver (FHSS) scheme?

To qualify for the FHSS, you must:
  • Be over the age of 18
  • Have never owned property in Australia, unless the Australian Taxation Office (ATO) has deemed you have suffered financial hardship
  • Live or intend to live in the premises you are buying as soon as practicable after purchase, or
  • Live in the property for at least six months of the first 12 months you own it
  • Only use the scheme once, meaning you can only make one withdrawal from super to use as the deposit for your home.
 How much can I save in the First Home Super Saver scheme for a deposit?

You can contribute up to $15,000 a year and $30,000 in total under the FHSS scheme. The FHSS is determined individually too, so that means a couple can utilise up to $60,000 through the scheme. These contributions, plus any others you or your employer make, must fall within the annual contribution limits for the year.

How much can I have released from the First Home Super Saver scheme?

From your non-concessional contributions, 100% is eligible to be released and if your contributions concessional, 85% of the amount saved will be eligible to be released.

Remember that the maximum amount that could be released is not the actual amount you will receive from the ATO, as they are required to withhold the appropriate amount of tax and offset the funds against any outstanding Commonwealth debts you may have.

How do I withdraw contributions under the FHSS scheme?

In order to make a withdrawal of your savings under the scheme, you are required to make an application to the Australian Taxation Office (ATO). You can only make one withdrawal under the scheme in your lifetime.

You do not need to have found your home yet, but you will need to buy a home within 12 months of withdrawal. The ATO can extend this to 24 months under certain circumstances.

There are also superannuation contributions which will not qualify and cannot be withdrawn under the scheme, such as Superannuation Guarantee contributions made by your employer, as well as spouse contributions (which are those that your partner may choose to put into your superannuation fund).

What if I don’t end up buying a home?

If for some reason you are unable buy a home before your time expires, you may either contribute the released amount back into your superannuation or pay a tax equal to 20% of the concessional amount released. This removes the tax benefit you received from using the First Home Super Saver scheme.

Need more advice about the First home super saver scheme?

Buying your first home is as complex as it is exciting and it’s important to consider whether the scheme is right for your personal circumstances. Speaking with a local financial adviser with mortgage experience can help further look into your eligibility, tax obligations and other implications of purchasing your first home.