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First Home Super Saver Scheme Explained


While industry experts are calling it ‘the most tax effective way to buy your first property’, how does the First Home Owner Super Saver Scheme actually work?

The process of saving for a house deposit sounds simple enough, right? Unfortunately, the cost of living in Australia certainly isn’t getting any cheaper, and neither is buying your first home. As house prices continue to rise, so too does the ideal deposit that is required in order to get the all important pre-approval for a home loan. Thus, it can be all too easy to feel deflated if you’re facing an obstacle on the timeline linked to saving for a house deposit.

However, there are plenty of ways to get creative when it comes to culling your expenses, increasing your income, and ultimately save like crazy in order to get into your first property. It’s not just ordinary Australians thinking of new ways to break into the property market though. In recent years, the Federal Government has released its own collection of grants, funding and concessions to stimulate the economy, such as the First Home Owners Grant, HomeBuilder Grant, and even the Family Home Guarantee.

However, one of the arguably least understood schemes available to first home buyers is the First Home Super Saver Scheme, or the FHSS. Although it’s been around since 2017, the very nature of the scheme and changes to how it works have arguably made it one of the more complex options for first home buyers to utilise – but that doesn’t mean that it isn’t worthy of your consideration.

Understanding The First Home Super Saver Scheme

The First Home Super Saver Scheme (FHSS) helps Australians boost their savings for a first home by allowing them to build a deposit inside superannuation, and essentially gives them a tax cut. First introduced in the 2017-2018 Federal Budget as a means to reduce pressure on housing affordability, the FHSS applies to voluntary superannuation contributions made from 1 July 2017. 

First home buyers can make voluntary concessional (before-tax) and non-concessional (after-tax) contributions into their super fund to save for a first home of up to $15,000 per financial year. Under the new budget released in 2021, the First Home Super Saver Scheme has been expanded to allow eligible first home buyers to release up to $50,000 of their superannuation to purchase a home, up from the previous cap of $30,000. The scheme has been designed to encourage younger Aussies to save, and in turn be taxed less accordingly.

Australians are able to utilise the scheme if they are a first home buyer, plan to live on the premises they are buying, and intend on living there for at least six months during the first twelve months of ownership. However, there are a number of other important things that potential applicants need to know if they plan to use the First Home Super Saver Scheme.

  •       You must apply for and receive an FHSS determination from the Federal Government before signing a contract for your first home, or applying for release of your FHSS amounts via the ATO.
  •       You need to make sure you correctly enter each of your eligible contributions into the FHSS determination form, and do not total the contributions.
  •   Superannuation guarantee contributions made by your employer, and spouse contributions cannot be released under the FHSS scheme.
  •   If you make an error in your FHSS determination, you can correct this by requesting another determination, provided you have not signed a contract or requested a release.
  •   If you provide incorrect information in your FHSS determination and later request a release based on that incorrect information, it is likely that your request will be cancelled and any FHSS money will be returned to your super fund.
  •   You can only request a release under the FHSS scheme once. If your release request is cancelled, you will not be able to apply again in the future.
  •   You should request the release of your FHSS amounts around the same time you start your home buying activities, such as when you apply for a home loan.
  •   The home you purchase or construct must be located in Australia.
  •   If you’ve already received a determination and signed your contract to purchase or construct your home, you must make a valid release request within fourteen days of entering into that contract.
  •   You can also sign your contract after you make a valid release request. You have twelve months from the date you make a valid release request to notify us if you have signed a contract to purchase or construct your home, or recontributed the required amount to your super fund.
  •   After you have requested the release, it may take between fifteen and twenty five business days for you to receive your money.

Eligibility is assessed on an individual basis, so what this means is 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.

Even if you have previously owned property in Australia, the Federal Government also offers provisions to the First Home Super Saver Scheme for those who have suffered a financial hardship that resulted in a loss of property ownership. Bankruptcy, divorce, loss of employment, illness, natural disasters and eligibility for early access to superannuation are examples of what they deem to be qualifying factors.

For those who are able to meet the eligibility criteria of the First Home Super Saver Scheme, they can also access other government programs such as the Home Builder Grant or First Home Owner Grant and other relevant concessions that may be offered by state or territory governments. However, these other programs apply their own criteria and conditions, and it’s up to the applicant to make their own enquiries to see if they potentially qualify for multiple grants. 

However, if you aren’t quite sure as to what the best approach is if you’re considering getting a pre-approval for a home loan, it’s always a good idea to consult with the professionals to ensure you’re putting your best financial foot forward. The right mortgage broker can help guide you as to which programs you may qualify for, as well as the best loan products to fit your individual set of circumstances – but where do you find one?

Get The Right Advice The First Time

With a background in banking, finance, business development and project management, there’s no better advocate to have on your team than Nikki Berzin. As a fully qualified mortgage broker and director of Cherry Lending & Finance, Nikki is passionate about all things finance, and empowering her clients with the tools to hit their property goals is what she does best.

If you’re looking to get into your first home, purchase an investment property or even want to look at your options for refinancing, the first step is starting the conversation. Get in touch with Nikki today, or call her directly on 0427 374 155 to bring your mortgage dreams to life.

Disclaimer: Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.  Subject to lenders terms and conditions, fees and charges and eligibility apply.

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