Your Guide To The First Home Super Saver Scheme

Are you a first home buyer trying to get your foot in the door of Australia’s near unobtainable property market? Whether you’re trying to invest or buy your forever home, today’s property prices are holding us back. 

But, it’s not all doom and gloom and missed opportunity. If the Australian Government has its way, they’ll soon introduce a First Home Super Saver Scheme to help desperate first home buyers get a leg up.

Here’s what you need to know. 

What is the FHSSS? 

The government market it as a scheme to fast-track savings for your house deposit. Essentially, you contribute extra money to a dedicated superannuation account, and with the benefit of lower tax / tax deductions for the money you contribute – meet your savings goal sooner.

It still needs to be officially passed – consultations closed on 4 August so we should hear an announcement soon.

How does it work? 

From 1 July 2017, you can start making voluntary contributions to your superannuation account, up to $15,000 each year. Then, from 1 July 2018, you’ll be able to apply to withdraw your voluntary contributions for your first home deposit. Users of the scheme can only save up to $30,000 total as part of the scheme. 

Now, this isn’t the compulsory amount your employer makes! This is money you either salary sacrifice (pre-tax earnings) or that you personally contribute to your super (after tax).  

What You Can Do 

Should the scheme be passed by parliament, the ATO will administer it. You’ll need to opt in and determine your eligibility to use the scheme (and make sure you can withdraw your money when you want it!). 

Your accountant or financial planner should be able to give you more information on the scheme and the benefits (and limitations) for your individual earnings and financial position. Like every government initiative, there are pros and cons depending on individual circumstances. So, it’s best practice to get qualified advice before you begin. 

While we wait for an outcome – I  can explore other strategies with you to enhance your financial position with a budget and savings plan that gets you to your goal, sooner. 

If you have a self-managed super fund – please get in touch and I’ll help you understand how you can use your fund to boost your house deposit savings.