First Home Super Saver Scheme and Salary Packaging
Save for your first home faster by taking advantage of salary packaging.
The First Home Super Saver (FHSS) scheme is a federal government scheme to help Australians save for their first home sooner.
Saving for a house is a struggle for many, especially with the rising cost of living. The FHSS scheme allows you to use the concessional tax rate of superannuation to save faster for a house deposit.
How does the First Home Super Saver (FHSS) scheme work?
The FHSS scheme allows you to make voluntary contributions into superannuation (both before and after tax) and later withdraw these contributions (along with a deemed amount of earnings) from your super account to buy or build your first home.
The ATO website has the full details on who is eligible, but generally speaking you can take advantage of the scheme if you:
- are 18 years or older,
- have never owned a property in Australia before,
- have not previously made a FHSS release request.
You can withdraw up to $15,000 of your voluntary contributions from any one year, and a maximum of $50,000 in total across all financial years. You will also receive a deemed amount of associated earnings on these contributions (less applicable taxes).
You must use your FHSS amount to buy or build a residential property. It can’t be used to buy a houseboat, motor home, vacant land (unless you intend to build on it), or any other premises not capable of being occupied as a residence. Time limits also apply.
In addition, you must intend to live in the property as soon as it is habitable and for at least 6 months of the first 12 months from this point.
To find out more, visit the ATO website.
How can Maxxia help?
If you’re salary packaging additional superannuation with Maxxia, then you might already be on the way to saving for your first home!
Salary packaged contributions are a type of voluntary 'concessional' (before tax) contribution. You can apply to release these contributions under the FHSS scheme (along with any other voluntary contributions you make before or after tax, subject to the FHSS scheme withdrawal limits).
By making salary packaged contributions, you can also benefit from tax savings. Concessional contributions are generally taxed at a rate of 15%, which is lower than most people's marginal tax rate.
If you’re interested in learning more about the FHSS scheme and salary packaging, send a message to our friendly team.
Important things to know:
- The FHSS scheme applies to contributions made on or after 1 July 2017.
- Contributions to defined benefit funds and constitutionally protected funds are not eligible for release under the FHSS scheme. Before you start saving, you should check with your superannuation fund whether it will release money from your account under the FHSS scheme.
- Several other types of contributions are ineligible for release under the FHSS scheme. These include (but are not limited to):
- Super guarantee (SG) contributions made by your employer
- Mandated employer contributions made under an award or industrial agreement
- Spouse contributions
- Government co-contributions
- Annual concessional (before tax) and non-concessional (after tax) contribution limits apply to contributions made to your super. For more information, visit the ATO website.
- You should carefully consider your own financial circumstances, objectives and needs and consider obtaining financial advice before deciding to make additional voluntary contributions to super, or to make a FHSS release request.
- We also recommend that you ask your superannuation fund about any fees, charges, and insurance implications that may apply if you make an additional voluntary contribution, or request a FHSS release. You should also read your super fund's Product Disclosure Statement (PDS).
- If you're a high-income earner, you may be liable to pay Division 293 tax. This reduces the tax concession on your concessional contributions. To learn more, visit www.ato.gov.au
Things you need to know: The above information is not intended to constitute taxation or financial product advice. Your benefits and savings will vary depending on your personal objectives, financial situation and needs. We recommend you obtain independent financial advice before making any financial decisions. Eligibility criteria and terms and conditions apply. All salary packaging proposals are subject to the requirements of your employer. Administration fees will apply. The actual administration fee that applies to you may vary depending on your employer. ITCs (refund on GST) are excluded. Maxxia may pay and receive commission or rebates in connection with some services and products it provides or arranges to be provided by third parties. Maxxia Pty Ltd ABN 39 082 449 036 Authorised Representative (No. 278683) of McMillan Shakespeare Limited (AFSL No. 299054).
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