With property prices starting to show signs of plateauing and even decreasing, many are exploring options on how to enter the property market in the future. One new opportunity that was introduced from 1 July 2017 is the First Home Owner Super Saver Scheme (FHSS). The goal of this scheme is to encourage taxpayers to use the superannuation environment to help save for their first homes.
Contributions were able to be made from 1 July 2017 with withdrawals from super for the scheme able to be made from 1 July 2018. However like any tax concessions there are detailed rules and eligibility criteria.
There is a limit of $15,000 per year or $30,000 in total but the contributions can be made either before or after tax. It is important to note this only applies to first home owners – so you cannot have owned any property in Australia previously even if it was only an investment property. You can also only apply once to have the funds withdrawn from super and must purchase the property within 12 months of the withdrawal and live in the house for a period of at least 6 months in the first 12 months of ownership. However the benefit is that the earnings those funds make while in the super fund are only taxed at 15% rather than at your personal tax rates. Any withdrawals are then taxed at your marginal rates but have a 30% offset applied to reduce the tax payable.
If you have any queries about this scheme or the best way to save for your first home, please do not hesitate to contact us. Please note this is generic advice and is not a recommendation. Elysium advises you to seek personalised professional advice before making any decisions regarding superannuation.
To make an appointment at either Scoresby, Malvern or Monbulk please contact us.