The First Home Super Saver (FHSS) Scheme enables first time homeowners to leverage their superannuation in order to save for their first home.
It’s a great scheme for the first time home buyers struggling to get onto the property ladder. One of the biggest obstacles to buying your first home is usually saving for that first deposit. Through the FHSS scheme, you can fast-track your savings for the deposit by saving money through a concessional superannuation scheme that offers you good prospects for growth. It is a particularly attractive option for many young prospective homebuyers for whom home ownership seems like a distant dream. The FHSS is a radical move. Previously, it was impossible to tap into a super until one had hit the retirement age. The First Home Buyer Super Saver Scheme allows a contributor to make a capped contribution along with a single withdrawal for the home purchase or home construction.
The FHSS has been introduced by the Australian government to help first time buyers access affordable housing. Prospective homeowners are able save money a lot faster by taking advantage of the concessional tax rates for the superannuation funds. Buyers can subsequently apply to release the funds and any associated earnings.
Who is Eligible for a FHSS?
While there are no age restrictions on super contributions, you have to be 18 years to access your funds under the First Home Buyer Super Saver Scheme. You can make contributions into any super fund and even put money into more than one super fund.
To be eligible for the scheme, you must satisfy the following requirements:-
- You must not have owned property in Australia previously. This applies to all kinds of properties be they commercial properties, investment properties, a lease of land or residential properties. However, there may be exemptions if you have owned property before but the ATO is able to establish that you have suffered a serious financial hardship.
- You mustn’t have released FHSS funds previously. You can only release once.
- You intend to live in or must have lived in the property that you are planning to buy as soon as possible. The requirement is that you must live in the property for at least 6 months out of the first 12 months of ownership once it is practical to move into the property.
- The FHSS funds cannot be used to purchase various kinds of properties such as vacant lands, a house boat, a motor home or any kind of property that cannot be used as a residence.
Releasing Your Funds under the FHSS Scheme
Once you are ready for the purchase, you can apply to have the eligible FHSS contributions released for the home purchase. You are allowed to release a maximum of $15,000 for any single financial year or a maximum total of $30,000 across all the years.
Once the FHSS contributions have been released, you must sign the contract to build or buy a new home within a period of 12 months.
Call an accountant Melbourne professional today to help you familiarize yourself with and take advantage of the First Home Super Saver Scheme.
