First Home Super Saver Scheme: What You Need to Know

The Government’s 2017 Federal Budget has provided a new incentive for first home buyers in the form of a “First Home Super Saver Scheme” that aims to assist Australians in getting into their first home sooner! The aim of the program is to reduce the pressure on those entering the housing market later than previous generations due to a lack
of savings and inflated house prices.

The scheme allows Australians who are purchasing their first home to build a deposit within their superannuation by making voluntary contributions to super from 1 July 2017 of up to $15,000 per year. These contributions will be taxed at the super concessional rate of 15%. These contributions can be withdrawn from super after 1 July 2018 up to a maximum of $30,000 and will be taxed at your marginal tax rate less a 30% offset. By saving for your home deposit in this manner, savings are boosted significantly compared to standard savings accounts due to the generous tax savings offered within the superannuation environment.

In December 2016, the former WA government increased the First Home Owners Grant from $10,000 to $15,000 for first home buyers who were building or purchasing a brand-new property that had never been lived in. However, with the new state government coming into power, the additional $5,000 FHOG boost has been shelved, taking it back to $10,000 as of 1st July 2017. This change at a state government level has made it, once again, harder for first home buyers to access the property market.

Federal Treasurer, Scott Morrison stated recently that as part of the Federal Government’s plan to help make it easier for Australian’s to get into their first home, first home buyers could take advantage of the “First Home Super Saver Scheme” by making concessional contributions into their superannuation with the intention of building a deposit for their first home.

When does the First Home Super Saver Scheme Start?

Concessional contributions to superannuation for the First Home Super Saver may begin from the 1st of July 2017 and will be allowed to be withdrawn from the 1st of July 2018.

How does the First Home Super Saver Scheme Work?

Australians can contribute up to $15,000 per year and $30,000 in total as part of the First Home Super Saver Scheme. Voluntary contributions must be made within existing superannuation caps, and the total contributions made including BOTH voluntary and compulsory employer contributions must not exceed $25,000 for the financial year ending 30 June 2018.

If this sounds like something you’d like to know more about or you’re already an aspiring first home buyer, contact our experienced brokers today to find out just how much you could save and when you’ll be able to put a deposit down on your very first home!