• How your superannuation can help you enter the property market



    Author: REI Super

    We all know how hard it is for Australians to buy their first property and saving for a deposit seems like an impossible task. This is where your superannuation might be able to make what seems like the unachievable to be achievable.

    The First Home Super Saver (FHSS) Scheme was developed by the Australian Government to help first home buyers get a foothold in the property market sooner.

    The FHSS scheme allows you to save money for your first home inside your super fund. If you are a first home buyer, this will help you save faster.

    The rules - what you need to know

    Under the scheme, as a single person you can contribute extra money into your super (up to $15,000 per financial year). The maximum you can contribute towards the FHSS is $30,000 per person. You can then withdraw these amounts (in addition to associated earnings / less tax) from your super fund to help with a deposit for your first home. As a couple you could potentially put a total of $60,000 towards your deposit from your super.

    Does this sound like something you could benefit from?

    Check your eligibility for FHSS

    To qualify for the first home super saver scheme you must meet the following criteria:

    • You must be 18 or older to access your super contributions.
    • You have never owned a property before, including an investment property.
    • You cannot use your contribution to purchase a houseboat, motor home or vacant land.
    • You can only make use of the scheme once.

    You may still be eligible for the FHSS even if you have previously owned a property in Australia under the financial hardship provision. Visit the ATO website to learn more about this.

    There are many rules around this scheme and we recommend you visit the ATO website for further details. 

    Below is a brief outline of just some of the rules associated with this scheme.

    There are limits on how much you can save

    The maximum amount per person you can contribute to super using the FHSS Scheme is $30,000.

    Each person has an annual contribution limit

    Rules and limits for the FHSS apply to an individual, which means both members of a couple planning to buy their first home are eligible to use the scheme to save for a home deposit.

    The individual-based limits give couples the chance to save up to $60,000 using the scheme.

    However, they will still have to adhere to maximum contribution limits for concessional and non-concessional limits in their super or they may have to pay extra tax.

    Your super fund is not in charge

    The ATO – not your super fund – decides what super contributions count towards the FHSS and the associated earnings. It then advises your super fund on the amount that can be released when you submit an application to withdraw your deposit savings.

    You can buy a property with someone else

    You can still access your FHSS savings even if you purchase a house with someone who is not a first homebuyer and you want to buy your new family home in both names.

    Eligibility for the FHSS is assessed on an individual basis. This means couples, siblings or friends can each access their own eligible FHSS contributions to purchase the same property. If any of you have previously owned a home, it doesn’t stop anyone else who is eligible from applying.

    What happens if I have accessed the FHSS but don’t buy a home?

    If you haven't contracted to purchase or construct a home within 12 months of receiving the FHSS amounts, you can either apply for an extension of up to 12 months, put the same amount of money back into super less any tax withheld by the ATO, or keep the released amount and be subject to a FHSS tax.

    More information   

    REI Super is here to help inform, advise and inspire our industry.  Click through to see the benefits of becoming an REI Super member today.  

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