The First Home Super Saver Scheme: Supercharge Your First Home Dreams
Did you know that there’s a smart way to save for your first home using your superannuation? In March 2023, the First Home Super Saver Scheme (FHSSS) opened up an exciting opportunity for aspiring homeowners. Let’s dive into the basics of how this scheme can help you unlock your dream
How Does It Work?
When you think of your superannuation, you probably think of retirement savings. However, with the FHSSS, you can contribute extra money to your super, and later, you can use it to buy your first home. The cool part is that super earnings are taxed at a lower rate compared to other investments or bank accounts in your name.
Am I Eligible?
To qualify for the FHSSS, you need to be at least 18 years old, have never owned Australian real estate, and be making voluntary super contributions.
Contributions and Withdrawals
You can put in up to $15,000 each year within your contribution limits. The maximum you can take out, including earnings, is $50,000. Your contributions can include money from your salary, personal contributions, and more.
How to Apply
Before you sign a contract or buy a home, you must get an FHSS determination through MyGov. After that, you can request to take out the funds, either before signing or within 14 days after.
Some of the money you take out will be taxed, called the assessable amount. This includes contributions and earnings and is taxed at your normal tax rate, but you get a 30% tax offset.
What You Need to Know
After you apply for the release, it takes about 15 to 25 business days for the ATO to send you the money. You have 12 months to buy a home and live in it for at least six of the first 12 months. If you don’t, you either need to put the money back into super or pay extra FHSS tax.
Once you’ve contributed to super and the funds are released, they can only be used for your home purchase. Changing your mind means either putting the money back or paying extra tax.
To get a full grasp of how FHSSS can help you and its potential benefits, consider talking to a financial advisor and check out ato.gov.au. Also, don’t forget to explore state-based incentives like stamp duty concessions or first home buyer grants.
In a nutshell, the FHSSS is like a turbo boost for your journey to homeownership. It’s a savvy strategy if you’re dreaming of owning your first home.