FOR many Aussies, particularly younger adults, saving for a first home can feel like climbing a mountain. Rising property prices, rent, and everyday living costs can make it difficult to pull together a deposit.
What many people don’t realise is that there is a government scheme that can help you get ahead.
It is called the First Home Super Saver (FHSS) scheme, and it allows eligible people to use certain voluntary super contributions to help buy or build their first home. The important word here is voluntary.
This scheme is NOT about taking money from the super contributions your employer has to pay. Those compulsory employer contributions cannot be accessed through the FHSS scheme. Instead, it applies to eligible voluntary contributions that you choose to make into your super.
For many people, these voluntary contributions may be made through salary sacrifice or by making personal contributions into super.
Salary sacrifice is an arrangement where you choose to have part of your before-tax salary paid directly into your super instead of receiving it as take-home pay. It saves you tax and helps you build a deposit under the FHSS scheme.
There are limits. You can contribute up to $15,000 of eligible voluntary contributions in a financial year, with a maximum of $50,000 across all years that can count towards the scheme. The amount you may be able to withdraw depends on the type of contribution you made, together with an amount of associated earnings calculated under the scheme.
The FHSS scheme is designed for first home buyers. To qualify, you must meet the eligibility rules set by the Australian Taxation Office (ATO), including never having owned property in Australia. Eligibility is assessed for each individual, which means two eligible people buying a home together may each be able to use the scheme if they both qualify.
There are also important conditions after you buy. You must genuinely intend to live in the property as your home as soon as it is practical after purchase, and you must live there for at least six of the first 12 months once you are able to move in.
One of the biggest mistakes people can make is leaving everything until the last minute.
The ATO recommends requesting a First Home Super Saver determination before ownership of a property transfers to you. When you are ready, there is a process that includes requesting a determination and then requesting the release of your eligible amount. It sounds a bit complicated, and following the correct steps is important, but you can access help to understand how it might work for you.
Like many government programs, the FHSS scheme has detailed rules and will not suit everyone.
