First Home Super Saver Scheme

The First Home Super Saver Scheme (FHSS) allows you to make voluntary before-tax and after-tax contributions to your super. You can then apply under the FHSS to have your voluntary savings released to help you buy your first home.


Who is Eligible?

You can use this scheme if you are a first home buyer and both of the following apply:

  • You will occupy the premises you buy or intend too as soon as practicable.
  • You intend to occupy the property for at least six months within the first 12 months you own it, after it is practical to move in.

You can currently apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $30,000 contributions across all years. You will also receive an amount of earnings that relate to those contributions.

From 1 July 2022, the amount of eligible contributions that can count towards your maximum releasable amount across all years will increase from $30,000 to $50,000. The amount of eligible contributions that can count towards your FHSS maximum releasable amount for each financial year will remain at $15,000.


Financial Hardship Provision

You may still be eligible even if you have previously owned property in Australia, if it is determined that you have suffered a financial hardship that resulted in a loss of ownership of all property interests.

The types of events that could result in the loss of property interests include:

  • bankruptcy
  • divorce, separation from a de-facto partner, or a relationship breakdown
  • loss of employment
  • illness
  • being affected by a natural disaster.

What You Should Consider

You can use only the voluntary contributions you’ve made to your super (including salary sacrificing), not the usual contributions your employer makes. This also means that spouse contributions and government co-contributions don’t count.

The scheme can be very technical and hard on those who make mistakes on the application. From July this year it will become more flexible, giving more discretion to the Australian Taxation Office (ATO) to amend applications, among other changes.


Pros

  • If you take the right steps, you may be able to save for a deposit for your first home faster
  • You can maximise your savings on tax as you only are required to pay the lower super tax (15%) instead of your typical income tax (which maxes out at 45%).

Cons

  • The scheme is complex and requires a few years to build the contributions in your super
  • If you decide not to buy a house, you either need to put the money back into your super, or withdraw it and get taxed
  • You can save a maximum of $50,000 from 1 July 2022 so it will most likely only cover only part of a deposit
  • If you’ve already signed a contract for a property, you’ve got just two weeks to put in a request to withdraw your savings. Getting your money out usually takes 15–25 business days

Learn more about the First Home Super Saver Scheme or some more tips for beginners.

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