Giving First Home Buyers more help with getting into the property market
The Australian Government introduced the First Home Super Saver Scheme (FHSS) in 2017 to allow greater housing affordability for first home buyers. This is a separate initiative to the First Home Buyers Grant.
In a nutshell, FHSS allows those over the age of 18 years to save for their deposit within their superannuation fund allowing greater tax benefits (taxed at 15%). The maximum that can be saved is $15,000 per financial year to a total amount of $30,000. This saving can be done as a before-tax (salary sacrifice) contribution or after-tax (out of your net wage). From 1st July 2018 first home buyers can then apply to release the saved contributions and any related earnings for the purchase of their home.
There are a number of conditions including that buyers must live in the property for at least the first 6 months of ownership. If you are using the funds to purchase a block of land to build the first home on, the contract to construct your home must be entered into within the 12 months (or an extended period).
Unlike the First Home Buyers Grant which isn’t available to couples where one couple has previously been received a grant, the FHSS allows couples to apply separately. The individual who has never purchased a home before can utilise this scheme. There are also provisions for financial hardship assessment.
The scheme allows first home buyers to withdraw 100% of the after-tax amounts and 85% of salary sacrifice amounts.
Please Note: The information within this blog post is general. Ristic Real Estate does not offer financial advice and encourages buyers to always seek independent advice prior to making any decisions relating to financial matters or property purchase.