First Home Super Saver Scheme
The First Home Super Saver (FHSS) scheme allows eligible first home buyers to save faster for their first home within their super fund.
This scheme is highly beneficial to first home buyers due to the favourable tax treatment of super, meaning that you will be able to save for your deposit faster whilst potentially reducing the amount of tax needing to be paid.
How does the FHSS scheme work?
The FHSS scheme allows you to make voluntary contributions into your super fund, and then later apply to have these contributions released for a home deposit, along with the associated earnings.
The two types of contributions you can make towards the FHSS scheme include:
- voluntary concessional contributions – including salary sacrifice amounts or contributions for which a tax deduction has been claimed.
- voluntary non-concessional contributions – these are made after tax or if a tax deduction has not been claimed.
First home buyers can contribute a maximum of $15,000 for each financial year and a maximum of $50,000 overall, as of 2021.
Then, once you are ready to receive your FHSS amounts, you can apply to the Australian Taxation Office (ATO) for an FHSS determination to get your contributions released.
To be eligible to use this scheme, you must be a first home buyer who is at least 18 years of age, and:
- have never owned a property in Australia; and
- have not previously requested a FHSS release; and
- live, or intend to live, in the premises you are buying, and intend to live there for at least 6 months within the first 12 months that you own it.
You must buy a residential property, which includes vacant land, but not any premises that cannot be occupied as a residence, nor a houseboat or motorhome.
When to apply for a FHSS determination and release
You must apply for and receive an FHSS determination from the ATO before signing a contract or applying for the release of your FHSS amounts.
You can make a release request before or after signing your contract to purchase/construct a home.
However, if you sign your contract before making a valid release request, you will need to:
- have an FHSS determination before you sign; and
- make a valid release requestion within 14 days of entering the contract.
Keep in mind that you can only make one release request in your lifetime. Therefore, it is important to take care in filling your determination form, as providing any incorrect information will likely result in your release request being cancelled and you will be unable to apply again.