September 11, 2023 | 6 min read
Summary: The First Home Super Saver Scheme is a valuable initiative to help first-time buyers overcome the challenges of entering the property market.
Purchasing a home is a significant financial milestone, but the ever-increasing property prices make it challenging for first-time buyers in Australia to enter the market.
To help ease this burden, the Australian government created the First Home Super Saver Scheme (FHSSS). The FHSSS is an initiative aimed at helping first-time buyers save for their first property purchase. It enables eligible individuals to make voluntary contributions into their super fund, which can later be withdrawn for the purpose of financing their first home deposit.
One of the main benefits of the scheme, which became operational from 1st July 2017, is it allows aspiring homeowners to save money for their first property within their super fund, taking advantage of tax concessions and potentially accelerating their path to home ownership.
In this guide, we will outline the details of the First Home Super Saver Scheme, including how it works, how to participate in it, and the benefits it offers.
To participate in the fhsss, you must meet certain eligibility requirements:
Under the scheme, you can make voluntary contributions to your super fund specifically for the purpose of purchasing your first home. These contributions fall into two categories:
Once you have made voluntary contributions, you can apply to release these funds along with associated earnings for purchasing your first home. The released amount is subject to the following limits:
The primary advantage of the FHSSS lies in the tax concessions it offers. Voluntary super contributions under the scheme are taxed at a concessional rate of 15% within your super fund, which is generally lower than most peoples marginal tax rate (the rate you pay on your income).
Additionally, when you withdraw the funds to buy your first home, they are taxed at your marginal tax rate, but you receive a 30% tax offset, effectively reducing the tax burden.
There are quite a few stages involved in the process of participating in the scheme and accessing the funds when the time comes to buy your home, but by following these steps, the process will be fairly straightforward:
The First Home Super Saver Scheme offers several benefits for aspiring homeowners, including:
Despite its advantages, there are some considerations to bear in mind:
The First Home Super Saver Scheme is a valuable initiative to help first-time buyers overcome the challenges of entering the property market.
By taking advantage of the tax concessions and the savings opportunities it offers, eligible applicants can accelerate their path to home ownership. However, it's essential to consider the long-term impact on your retirement savings and understand the eligibility criteria and withdrawal process before committing to the scheme.
If you meet the eligibility criteria and plan wisely, the FHSSS can be a powerful tool to help make your dream of home ownership a reality.
As one of the largest super providers in Australia,* we’re focused on delivering competitive returns, so your money continues to grow. When it comes to support, we go the extra mile— providing general super advice at no additional cost.
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This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024. NULIS is part of the Insignia Financial group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (‘Insignia Financial Group’). The information in this article is current as at November 2023 and may be subject to change. This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. It is recommended that you consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you make any decisions about your superannuation. You can obtain the latest copy of the PDS (or other disclosure documents) and TMD by calling us on 132 652 or by searching for the applicable product at mlc.com.au. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.