A Smart Start: The First Home Super Saver Scheme (FHSS)
December 2019
Government initiatives are well worth investigating when saving for your first home. Not only are the First Homebuyers Assistance Scheme and the First Home-Owner Grant available, there is a further pathway well worth exploring.
The First Home Super Saver Scheme (FHSS) underwent a minor revamp in April this year, which reinvigorated interest in this program. Under the FHSS, those saving for their first home can make voluntary before-tax and after-tax contributions into their own superfund to save for their first home. Then buyers can apply to release the contributions, and associated earnings, and put them toward the purchase of their first home.
If you meet the criteria of being over the age of 18, having never owned a property in Australia, and haven’t previously applied for an FHSS release, it is worthwhile investigating how this program can potentially benefit you.
While it is a strong scheme, it still pays to plan ahead and consider key steps before you start your super savings. Contact your superfund to ensure you can access your funds when required. Then establish a salary sacrifice with your employer to enable the funds to come straight off your pay and directly into your super (not all employers offer this option).
When buyers are ready to access the funds, naturally, eligibility criteria must be met. For example, firstly, the FHSS requires that the property purchase be in Australia only. Secondly, buyers must apply for and receive an FHSS determination before signing a purchase contract or applying for the release of FHSS funds. Thirdly, buyers have 12 months from the date of a funds release to either sign a contract to purchase or build a home or redeposit the FHSS amount (less tax withheld) back into your super. Additionally, it is important to remember that when money from an FHSS is released and utilised, it is mandatory that the funds and taxes be claimed on that year’s tax return.
With manageable criteria, abundant potential, and the power to use your own money wisely, the FHSS is another offering that may help new buyers take their first steps towards homeownership.
