Saving for your first house? The First Home, Super Saver Scheme could assist you
The first home super saver (FHSS) scheme allows you to save money for your first home in your super fund.
The scheme allows you to make voluntary contributions (both before-tax concessional and after-tax non-concessional) into your super fund to save for your first home.
You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $50,000 contributions across all years.
Eligibility and conditions
You are 18 years old or older when requesting the release of money under the FHSS scheme. However, you can make eligible contributions before you are 18 years of age.
You are a first home buyer, having never owned property in Australia – this includes an investment property, vacant land, commercial property, a lease of land in Australia, or a company title interest in land in Australia (unless we determine you have suffered a (financial hardship).
You intend to occupy the property you buy as soon as practicable and for at least 6 months within the first 12 months you own it after it's practical to move in.
You have not previously made a FHSS release request.
First Home Super Saver Scheme Example
Say you are earning $60,000. You want to put $10,000 of that salary (pre-tax) towards your home deposit. If you pay tax on that as normal and then put it in a normal bank savings account, you will pay around $3,250 of the $10,000 in tax.
Now, if you put that $10,000 in the FHSSS Account instead, you will be taxed at just 15%. This means you will only pay around $1,500 in tax. You can then put that extra money towards your first home instead of towards your tax.
When you withdraw your money, you will get taxed at your marginal tax rate of 32.5% minus an offset of 30%. In effect, you’ll also pay 2.5% tax when you withdraw your money.
In the right circumstances, the scheme can help you save for a home quicker, but you'll need to plan ahead to make it work for you as this is a complex scheme.