The First Home Super Saver (FHSS) scheme was introduced in the 2017-2018 Federal Budget, and was intended to reduce pressure on housing affordability.
The FHSS scheme provides first home buyers with the opportunity to use voluntary superannuation contributions (being contributions over and above any employer superannuation guarantee contributions) towards the cost of buying their first house. The FHSS scheme is not simply a matter of being able to withdraw money from your superannuation to fund your home deposit, instead, you first need to have made voluntary contributions into your superannuation, that you can then withdraw when it comes time to buy your first home (subject to meeting the necessary criteria).
The intention of the FHSS scheme is to encourage young people to put extra amounts into their superannuation fund, which is a more tax effective structure to hold and invest their money, when compared with investing their after-tax money in their personal names.
Previously, a first home buyer could contribute up to $15,000 in any one financial year under the FHSS scheme, up to a limit of $30,000 across all years.
This week, the Government secured passage of the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021, which increased the total limit from $30,000 to $50,000 (but leaving the maximum voluntary contribution per annum for the FHSS scheme at $15,000).
This will come as great news to those first home buyers who are trying to save money for a deposit, for a planned purchase in the coming years.
The FHSS only applies if you are a first home buyer, and where you will occupy the premises you buy for at least 6 of the first 12 months you own it.
Other criteria apply, so please contact your tax advisor for specific advice on how you can save for your first home more quickly.
If you do not currently have a preferred tax advisor, please contact us and we can introduce you to people we recommend.