The First Home Super Saver Scheme (known as FHSS Scheme) that was initially introduced by the Australian Government in the Federal Budget 2017-18 has passed through parliament and is now law. Its purpose is to make it easier for home buyers to save for a deposit on their first home. This is achieved by saving for a home deposit inside a super fund which has low tax rate. It’s also possible that a super fund may have a higher rate of return over a standard savings account.
So here’s how it works. From 1 July 2017, first home buyers can make voluntary contributions (both before and after tax) of up to $15,000 per year up to a total of $30,000 across all years, to their superannuation account in order to purchase a first home. These contributions along with the earnings can then be withdrawn for a home deposit in the future.
You can use this scheme if you are a first home buyer and both of the following apply:
• You either live in the premises you are buying, or intend to as soon as practicable.
• You intend to live in the property for at least six months of the first 12 months you own it, after it is practical to move in.
The Australian Tax Office provide further information on their website.
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Author: Nick Vincent