Five things you need to know about First Home Super Saver scheme
Do my employer's contributions count towards my deposit? By Andrew Yee, director, superannuation, HLB Mann Judd Sydney
Your normal super guarantee employer contributions will not be counted, as they will remain preserved until your retirement.
The FHSS only applies to extra voluntary contributions you make. Voluntary contributions can be either concessional contributions (pre-tax) or non-concessional contributions (after-tax).
Many employees will be able to set up salary sacrifice arrangements with their employer to make pre-tax contributions.
Individuals who are self-employed, or those whose employer does not offer a salary sacrifice option, will be able to make a personal contribution and claim a tax deduction in their personal tax return.
Will lenders count this as my deposit or do I still need to save extra? Daniel Cohen, lending adviser, Mortgage Australia
While each lender has different lending guidelines, it is expected that most lenders will view FHSS funds as genuine savings of the mortgage applicant and thus consider them as part of your deposit.
Whether you will need to save additional funds outside of super to form your deposit will mostly depend on how much you need for a deposit.
For example, if you are a single first home buyer purchasing a $600,000 property with a 10% deposit ($60,000), you may choose to save $30,000 in super (under the FHSS) plus $30,000 in an online savings account with your bank.
Will I still be eligible for the First Home Owners Grant if I use the FHSS scheme? Daniel Cohen, lending adviser, Mortgage Australia
While the FHSS scheme is based on national legislation, the First Home Owners Grant (FHOG) is state based.
The eligibility rules for the FHOG are different to the FHSS, so you will need to check with your relevant state government authority or ask your mortgage broker to work out if you are eligible for the FHOG.
The good news is that being eligible for the FHSS does not deem you ineligible for the FHOG.
Can I take advantage of the scheme if I am self-employed? Mark Chapman is director of tax communications at H&R Block
Yes, there are no restrictions on who can take advantage of the scheme. Both employees and the self-employed can participate.
You simply need to meet the normal eligibility requirements:
- You can't draw any money out until you are 18 years old (though you can make contributions from any age)
- This must be your first property.
- You mustn't have previously asked the ATO to release any funds from the scheme.
What if I am buying a property with someone else and they have owned a property before? Mark Chapman is director of tax communications at H&R Block
Your ability to access the scheme is assessed only on your own circumstances, not those of anyone else you might be buying a property with. So, ideally, each of you will be first time buyers and you'll each be able to draw the maximum amount from your super to pay towards the deposit.
But if you're buying with someone for whom this isn't their first property, you'll still be eligible to draw from your super, even if the person you are buying with can't.
So, whether you're buying as part of a couple, with siblings or friends, each of you can access your own FHSS contributions to pay towards a deposit.
If any of you have previously owned a home, it will not stop anyone else who is eligible from applying.
For more FAQs about the First Home Super Saver scheme, pick a copy of the August issue of Money, out now