The First Home Super Saver (FHSS) scheme was introduced in the Federal Budget 2017-18, with an aim to reduce pressure on housing affordability. The scheme allows eligible taxpayers to save money for their first home inside the superannuation system. The government says this concessionally taxed environment will help first home buyers save faster.
Your eligible clients should however be made aware that some changes have occurred to the FHSS scheme (more details here). The changes apply retrospectively to valid FHSS release requests and contracts entered into on or after 1 July 2018.
Note also that SMSF members must ensure that their fund’s trust deed allows for the release of funds to members as is drafted in the FHSS scheme.
The ATO notes that for individuals intending on purchasing their first home over the Christmas and January 2020 period, it is recommended to request a FHSS determination and make a release request as soon as possible.
How it works
Under the scheme, a taxpayer can make voluntary concessional and non-concessional contributions into their super fund to save for a first home. This applies from 1 July 2017. Then, from 1 July 2018, they can apply to release these voluntary contributions (along with related earnings), in order to help buy a home.
First home buyers must also meet the following conditions. They must:
- either live in the premises, or intend to as soon as is practicable
- intend to live in it for at least six months within the first year of it being owned, after it is practical to move in.
The scheme allows for a maximum of $15,000 of these voluntary contributions from any one financial year to be released, up to a total of $30,000 across all years. Earnings related to these amounts are also available. Readmore
