Those of you who are looking to buy your first home may be eligible to save for your deposit in the concessionally taxed superannuation system, using the First Home Super Saver Scheme (FHSSS).
This scheme may help you accumulate a larger deposit when compared to saving outside super.
Who can use the FHSSS?
To access the scheme, you need to be aged 18 or over, have not used the scheme before and have never owned real property in Australia.
What and how much can you contribute?
Only voluntary contributions you make to super will count towards your FHSSS balance.
Voluntary contributions include personal, salary sacrifice and additional employer contributions, but not compulsory employer contributions (such as Superannuation Guarantee).
However, voluntary contributions are limited to $15,000 per year and a total of $30,000. These contributions also count towards the existing contribution caps.
How much and when can you withdraw for your house deposit?
Withdrawals are capped at $30,000 plus associated earnings. The Australian Taxation Office (ATO) will determine the amount that can be released after allowing for applicable taxes.
Once you withdraw from the scheme you will need to buy within 12 months.
If you don’t buy within the required timeframe, you can contribute the released amount back into super or keep the money and pay tax equal to 20% of the assessable amount.
What can you buy?
You must buy a ‘residential premises’ with any amount withdrawn using the FHSSS. The premises has to become your home (not an investment property) and you need to occupy it for at least six months after you buy it.
If you are interested in the scheme, please do not hesitate to contact one of our Altitude Advisers.
This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different and you should seek advice from your financial planner who can consider if the strategies and products are right for you. For more information contact Altitude Advisers on (07) 3209 2300.