First Home Super Savers Scheme
The First Home Super Saver Scheme was an initiative introduced by the Federal Government to help deal with the issues around affordability in the housing market. If you have never owned a house before you may now be able to save for your deposit using the lower taxed environment in your superannuation.
How does it work?
Firstly, you must not have previously owned a home in Australia.
You may then be eligible to make voluntary contributions to superannuation, up to $15,000 per annum and $30,000 in total and withdraw these funds to use as a deposit for your first home. These contributions are counted towards your contributions cap and therefore must not exceed the normal annual limits.
You are also entitled to withdraw the associated earnings that these funds are assumed to have earned, whilst invested in super. This is calculated at a deeming rate specified by the ATO.
You will need to make the withdrawal from super before signing a contract on your home, and once you have the funds, the contract must be signed within 12 months, or penalties may apply.
If you have a partner, and are considering purchasing a home together, then the total amount available to you is $30,000 each. If your partner has owned a home before, then you may still be eligible to use the scheme for yourself, but not for your partner.
There is quite a bit to consider with the First Home Super Saver Scheme, so if you are thinking about this for yourself, or somebody that you know, please speak to your Adviser first before proceeding with the contributions. We will be able to navigate you through tips and traps associated with this strategy and help you to avoid making a costly mistake.