The First Home Super Saver Scheme: An Overview

The First Home Super Saver Scheme (FHSSS) is a government initiative designed to help Australians save for their first home. It was introduced in 2017 and allows individuals to save money for a deposit on their first home in a tax-advantaged way. The scheme is designed to help first home buyers get into the property market sooner and with less financial burden.

The FHSSS allows individuals to save up to $30,000 in their superannuation account and withdraw it for a deposit on their first home. The money saved is taxed at a lower rate than normal income, meaning that individuals can save more money in a shorter amount of time. The scheme also allows individuals to make voluntary contributions to their superannuation account, which can then be withdrawn for a deposit on their first home.

In order to be eligible for the FHSSS, individuals must meet certain criteria. They must be 18 years of age or older, an Australian citizen or permanent resident, and have not previously owned property in Australia. They must also have a valid Australian Tax File Number (TFN) and have held a superannuation account for at least 12 months.

Once individuals have met the eligibility criteria, they can start making contributions to their superannuation account. These contributions can be made as either concessional or non-concessional contributions. Concessional contributions are made before tax and include salary sacrifice contributions and employer contributions. Non-concessional contributions are made after tax and include personal contributions and spouse contributions.

Once individuals have saved the maximum amount of $30,000, they can then apply to the Australian Taxation Office (ATO) to withdraw the money for a deposit on their first home. The ATO will assess the application and, if approved, will release the funds to the individual. The money can then be used to purchase a property or to pay for associated costs such as stamp duty and legal fees.

The FHSSS is a great way for first home buyers to save for their first home. It allows them to save money in a tax-advantaged way and to access the funds when they need them. It is important to note, however, that the scheme is not a substitute for a deposit on a home loan. Individuals should still aim to save a deposit of at least 5-10% of the purchase price of the property in order to be eligible for a home loan.

Overall, the FHSSS is a great way for first home buyers to save for their first home. It allows them to save money in a tax-advantaged way and to access the funds when they need them. It is important to remember, however, that the scheme is not a substitute for a deposit on a home loan and individuals should still aim to save a deposit of at least 5-10% of the purchase price of the property in order to be eligible for a home loan.