Is it possible for a first home buyer to use their super? Yes, absolutely! The Australian Government's First Home Super Saver scheme brings this possibility to life, offering first-time homebuyers a unique way to accelerate their journey to homeownership. This innovative scheme taps into the potential of your superannuation fund, turning it into a viable source for a home deposit.
Key Features of the Scheme:
Voluntary Contributions
The scheme allows first-time homebuyers to make voluntary contributions to their super fund up to a cumulative $50,000, capped at $15,000 per fiscal year. These funds can then be used as a deposit for their first home.
Tax Benefits and Income Conservation
The scheme leverages the tax benefits associated with super, easing the process of saving for a deposit. Making additional before-tax contributions can significantly decrease your tax obligations, leaving more of your hard-earned money in your pocket.
Investment Earnings and Contribution Growth
Participants can withdraw the entire amount contributed, along with any investment earnings, when they're ready to purchase. Furthermore, voluntary super contributions grow according to the investment mix chosen for the super fund.
The scheme also allows a one-time lump-sum withdrawal, which includes 100% of after-tax contributions and 85% of before-tax contributions.
Eligibility Criteria:
- You must be 18 years old, a first-time property owner in Australia, and not have previously accessed funds from your super via this scheme.
- You should plan to live in the property for a minimum of six months in the first year.
- Even those who have unfortunately lost property due to financial hardship may still be eligible to apply.
What Happens If You Don't Buy a Home?
- The scheme offers a considerable degree of flexibility:
- After releasing your scheme funds, you have 12 months to sign a contract to buy or build a property.
- If no contract is signed during this period, you can request an extension, redeposit the funds into your super account, or retain the funds (subject to a tax equal to 20% of your assessable First Home amount, minus any tax already withheld).
Accessing the Scheme:
Start by applying through your MyGov account, requesting a determination directly from the ATO.
In essence, the First Home Super Saver scheme is not just a financial scheme but a golden opportunity for first-time homebuyers to make their dream of homeownership a reality sooner. With attractive tax benefits, this scheme incentivizes potential homeowners to make their move. As a team of experts dedicated to assisting home buyers, we invite you to connect with us to embark on a personalised journey towards homeownership.
