Making Sense of the First Homeowner Super Saver Scheme

From 1 July 2018 the Australian Government have released the First Homeowner Super Saver Scheme (FHSSS).  It allows first home savers to add money to superannuation, realise a tax saving and then withdraw the money from superannuation when the time comes to purchase a home. 

The scheme is complex and contains a number of rules and caveats which is why the uptake has been so poor.  However, if implemented correctly, it can yield benefits of over $4,000 for an individual.

In summary, by adding pre-tax money to superannuation you are taxed at a tax rate of 15% as opposed to your marginal tax rate which could be as high as 47%.  This could mean you receive a much bigger tax return than you usually would which can be added to your home savings.  Before purchasing your home, you can withdraw your savings from superannuation to further add to your deposit.   

Eligible savers can add a maximum of $15,000 per annum to superannuation and a maximum of $30,000 in total.

A few important details to remember;

• You must be over 18 and have never owned a property to participate in the scheme.
• Eligibility for the FHSSS is assessed on an individual basis, therefore both partners of a couple can participate.  If one partner is ineligible, this does not prevent the other partner from participating in the scheme.
• You must live in the home for at least 6 months within the first 12 months of ownership.
• You must sign a contract to build or purchase a home within 12 months of requesting to withdraw your money from superannuation.
• The cap for concessional contributions is $25,000 per annum.

If you would like assistance with making sense of this scheme, please call our office on 03 5224 2700.