Did you know that making contributions to your Superannuation fund could help you in purchasing your first home through the FIRST HOME SUPER SAVER SCHEME (FHSS)? You are able to make tax-effective contributions to your Super account to build a deposit to buy your first home. The ability to do this came into effect for first-time buyers in 2017, making it easier for you to save for your first home using your Superannuation to buy a house.
To qualify there are rules you must follow, so you should speak to a Financial Advisor or Mortgage Broker before making any Contributions to your Super, but here are the main items to be aware of:
- You must be a first-time buyer of a property. If you have purchased a home before, this isn’t for you.
- You can save a maximum of $15,000 per year, each person in the couple if you are both first-time buyers of a property.
- You can save a maximum amount in Super of $50,000 each. So, a couple could have a deposit of $100,000 if they are both first-time home buyers.
The best way to make Contributions to your Super fund is by sacrificing some of your income through ‘SALARY SACRIFICE’. Superannuation is taxed at 15% for Accumulators under the age of 60. After this age, the rules start to differ – positively facilitating to the younger First Time Home Buyers under the age of 60, making it easier to MAXIMISE TAX BENEFITS FOR FIRST HOME DEPOSIT. However, when you make Salary Sacrifice contributions, the maximum you can withdraw is 85%, which factors in that 15% Tax of Super. This is okay because:
- You have seen the Super Power of compound interest over time to build a deposit in a shorter amount of time by paying less tax, MAXIMISING FHSS BENEFITS FOR HOME OWNERSHIP.
- You have got into some great habits of living off of less than you earn. This will set the foundations of your cashflow when you do eventually own your first home, USING SUPER AS YOUR TOOL OF CHOICE.
MYGOV is where all the action takes place to notify the ATO of what you are doing, giving you easy access to information about your Super specifically. To access your super for property purchase, you can use the FIRST HOME SUPER SAVER CALCULATOR to help you determine the FHSS scheme eligibility as well as the rules and regulations.