Want to know more about the First Home Super Saver Scheme?
As you may have heard, from 1 July 2018 individuals may be able to withdraw funds from superannuation to help fund a home deposit. So is the First Home Super Saver Scheme (FHSSS) right for you? We have provided the following to assist you in making your decision.
Am I eligible for FHSSS?
You may be eligible for FHSSS if:
- You are aged 18 or over.
- Have not utilised the FHSSS before.
- Have never owned real property in Australia.
If you are deemed as suffering “financial hardship”.
How do I make a contribution?
Any voluntary contributions made to superannuation after 1 July 2017 may count towards FHSSS.
Voluntary contributions can be made via concessional contributions (before tax) or non-concessional contributions (after tax).
How much can I contribute?
You may be able to contribute up to $15,000 a year, and up to $30,000 in total under FHSSS.
Note: these contributions must be within existing contribution caps (e.g. $25,000 p.a. concessional contributions and $100,000 non-concessional contributions).
How will my contributions/earnings be taxed?
Concessional contributions are taxed at 15% inside the super fund, whilst non-concessional contributions will not be taxed entering the fund.
Investment earnings earned inside the fund on your voluntary contributions will be taxed at 15%.
When/how can I withdraw my funds from super?
You may be able to withdraw up to $30,000 plus investment earnings from your super fund from 1 July 2018 to purchase a residential premise.
You will need to apply for a withdrawal via the ATO who will then determine your maximum withdrawal amount and arrange for your funds to be released.
What kind of home am I eligible to purchase?
Under FHSSS you must purchase a residential premise that will become your home, examples may include vacant land (if planning to build), apartments and homes.
You must live in the premises for at least 6 month before considering renting this property out as an investment.
How long do I have to buy a home?
You will have 12 months after releasing your superannuation savings to sign a contract.
If you do not purchase a qualifying home within this timeframe you will be given two options:
- Re-contribute the released amount back into superannuation.
- Pay a tax penalty equal to 20% of the amount released.
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