I'm currently building a deposit to purchase my first home and looking to buy an existing one rather than a new build.
I stumbled across the government's first home super saver scheme and from what I've read it sounds like a great way to save up a deposit for a first home.
However, I'd like to hear other people's experiences with the scheme and any pros and cons they came across with it.
Thanks everyone
The government co contribution has nothing to do with the first home super saver scheme? The government co contribution still exists, 50c to the dollar
https://www.ato.gov.au/individuals/super/in-detail/growing-y…
You're thinking of the superannuation contribution. First home savers accounts originally started with the government contributing 17 cents for every dollar deposited. They stopped about a decade ago.
You'd want to be saving a fair bit alongside this. 15k per financial year of extra contributions to a max of 50k plus earnings on that.
It's a rather complicated scheme.
Used it and didn't find it that complicated.
Check how much you can contribute - salary sacrifice - withdraw when you buy a house.
Great scheme when you know when you want to buy and can plan to max it out.
Am I right in understanding you can only withdraw 85% of your voluntary contribution, up to $15k per financial year and $50k total?
In other words, to max out at the $15k per year, you'd need to contribute $17,647 per year?
Your max pretax contribution per year is 27500 (concessional contribution cap) minus super guarantee amount, over two years
https://treasury.gov.au/sites/default/files/2022-03/first-ho…
If you put in 15k before tax, super is taxed 15% that's why you can only withdraw 85% of the amount.
Under the scheme the maximum you can contribute is 15k per financial year
There are no cons..it's free money from government towards your first home
it's free money
No it's not. It's coming from your taxes.
No it's not. It's coming from your tax deductions
Via myGov you can request a super fhss report that will tell you how much you can withdraw. I was making a lot of voluntary contributions anyway so I just took some out for my deposit
How long did it take to get the funds in your account after you had requested for release?
Over the web it says 15-20 days, but I wanted to sign a contract and pay deposit but no one would wait that long right..
I did it and it was fairly straight forward. Maxed out my wife over a few years and I and pulled it all out about 6 months before we purchased. Basically a different place to store your house deposit and you get a few thousand "free" from the govt.
I set up a fairly complex spreadsheet that tracked it all if you are interested, happy to share.
How long did it take to get the funds in your account after you had requested for release?
Over the web it says 15-20 days, but I wanted to sign a contract and pay deposit but no one would wait that long right..
Can't remember but it was about a week or two. Once you have all your contributions in there, just rip it out. You have 12 months to spend it on a house!
Beware that super hasn't performed well the past 12 months, who knows how it will move going forward with inflation being high and interest rates going up.
This is a really good scheme if your super goes up, but if you drop $20k into super over a couple of years and it goes backwards or hardly grows…. that's not a good thing.
I guess you at least get to save on some tax by making your own contributions though.
The associated earnings on your FHSSS savings are deemed using a formula calculated by the ATO, not on the actual investment earnings on your super contributions.
I find the scheme to be a great incentive for home deposits. I'll be using this scheme for my first home, have yet to find and purchase though.
I've signed the contract but forgot to notify the ATO within 28 days.
The website was a bit misleading it also mentions "You have 12 months from the date you make a valid release request to notify us if you have signed a contract to purchase or construct your home"
I called the ATO, and they say there may be a 20% FHSS tax. That sounds like the released amount will be taxed at my marginal tax rate (less the tax offset) and on top of that another 20%. That's crazy!
Has anyone experienced this or successfully asked the ATO to waived the 20% tax due to an honest mistake?
Maybe reference what's on their website and see how you go or chat to someone else at the ATO and see what they say?
If you don't sign a contract to purchase or construct a home within 12 months of the date you requested a release, we may grant you an extension of time to do so for a further 12 months. There is no need to apply for this extension – we will generally grant it unless we have reason to believe that doing so would be inappropriate. We will notify you if an extension is granted.
At the end of the 12 month extension, if you have still not signed a contract to purchase or construct a home, you can choose to either:
recontribute an amount into your super fund(s). This amount must be a non-concessional contribution and be at least equal to your assessable FHSS released amount, less any tax withheld. This amount is stated in your payment summary, and may be less than the total amounts released to you.
keep the released amount and be subject to FHSS tax, a flat tax equal to 20% of your assessable FHSS released amount.
Notify us
If you sign a contract to purchase or construct your home, you must notify us within 28 days of signing the contract.
If you recontribute the assessable FHSS amount (less tax withheld) into your super fund, you must notify us within 12 months of the date you request the release of your FHSS money.
If you don't notify us that you have done one of the above or you choose to keep the FHSS amount, you may be subject to FHSS tax.
You can notify us by:
logging into ATO online services through myGov. Select Super, then Manage, then select First home saver.
It was pretty great when they were matching contributions. Less great afterwards.