First Home Super Saver Scheme for 1st Home Buyers
October 24, 2019
The First Home Super saver (FHSS) scheme allows you to save money for your first home inside your superannuation fund. This will help first home buyers save faster with the concessional tax treatment of super.
You can make voluntary concessional before-tax contributions into your Super Fund (taxed at 15%) to save for your first home.
You can also make non-concessional after-tax contributions (not further taxed in your super fund) into your super fund to save for your first home.
You can then apply to release your voluntary contributions from your Super Fund , along with associated earnings, to help you purchase your first home.
Singles can contribute up to $15,000 per year, or $30,000 per lifetime limit to their superannuation. Couples can contribute up to $30,000 per year, up to $60,000 limit collectively.
To release these voluntary contributions from your Super Fund you must meet the eligibility requirements.
You can use this scheme if you are a first home buyer and both of the following apply:
- You either live in the premises you are buying, or intend to as soon as practicable.
- You intend to live in the property for at least six months of the first 12 months you own it, after it is practical to move in.
Not only can you apply to release the voluntary contributions you have made to your Super Fund , you will also receive an amount of any earnings that relate to those contributions.
Three key things to remember are:
- You can only apply for release once.
- Don’t sign your contract to purchase or construct your home until after the Australian Tax Office (ATO) has released your money or you may be liable to pay FHSS tax.
- After the ATO has approved the release, it will take about 25 business days for you to receive your money.
Who is eligible
You can start making super contributions from any age, but you can’t request a release of amounts under the FHSS scheme until you are 18 years old, and you:
- have never owned property in Australia – this includes an investment property, vacant land, commercial property, a lease of land in Australia, or a company title interest in land in Australia
- have not previously requested the Commissioner to issue a FHSS release authority in relation to the scheme.
Eligibility is assessed on an individual basis. This means that couples, siblings or friends can each access their own eligible FHSS contributions to purchase the same property. If any of you have previously owned a home, it will not stop anyone else who is eligible from applying.
Financial hardship provision
You may still be eligible even if you have previously owned property in Australia, if the ATO determines 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 interest/s include:
- divorce, separation from a de-facto partner, or a relationship breakdown
- loss of employment
- being affected by a natural disaster
- being eligible for early access to superannuation.
If you want to be considered under the financial hardship provision you can apply by completing a First home super saver scheme – hardship application form. You should apply before you start saving, so that the ATO can determine if the hardship provision applies to you.
For full details please visit the ATO website.
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