WA Super News
First Home Super Saver Scheme
The great Australian dream of breaking into the property market is getting tougher for young Australians. House prices continue to surpass income levels, meaning saving for a home deposit is stopping many from entering the housing market.
To make things easier for young Australians, the Federal Government has introduced the First Home Super Saver Scheme. The scheme will allow you to use your voluntary or personal contributions that you make into your super fund as a deposit for your first home. This benefit of saving via super is that you can save more by paying less tax which means you can build your deposit quicker than outside of super.
How does it work?
To take advantage of the First Home Super Saver Scheme with your WA Super account, you need to make voluntary contributions of up to $15,000 per financial year and $30,000 in total, to your WA Super account. Pre-tax contributions and investment earnings are taxed up to 15%. The voluntary contributions can either be pre-tax (concessional) or post-tax (non-concessional) contributions.
To be eligible to make contributions and withdrawals from the First Home Super Saver Scheme, you must:
- Have never owned property in Australia before;
- Are not using the amount to purchase a houseboat, motor home, vacant land or any premises not capable of being occupied as a residence; and
- Have not previously requested a First Home Super Saver Scheme release authority.
You can start making contributions at any age, but requests to release amounts under this scheme cannot be made until you are 18 years old.
How much can I save?
The maximum amount you can contribute to your super for a home deposit using the scheme is $15,000 each financial year, and up to $30,000 in total.
However, if you are a couple you can each contribute up to $15,000 per financial year, and up to $30,000 in total each, ie $60,000 as a couple in total.
Contributions under this scheme must be made within existing contribution caps. More information on contribution caps is available here.
How do I access the money I have saved in my super?
After 1 July 2018, when you are ready to buy your first home you need to apply directly to the Australian Tax Office (ATO) to request a release of your funds. If approved, WA Super will transfer the money to the ATO who will then pay you.
You can withdraw up to $30,000 of your contributions plus any associated earnings, less any applicable contributions tax that has been deducted.
It is important to remember, you can only receive one payment under the First Home Super Saver Scheme.
Currently, an application form hasn’t been made available on the ATO website, once this becomes available we will supply a link on our website.
Want to move into your first home faster? Start contributing to your super today.
Voluntary contributions to your super account after 1 July 2017 are eligible to be withdrawn from 1 July 2018. So if you are thinking about buying a house in the next few years, make sure you start contributing to your super.
To see how much more you can save for a house deposit inside super, visit the Government’s online estimator.
For more detailed information on the scheme, please visit the ATO website here.
For more information from WA Super, please contact us on 9480 3500 or email us at email@example.com.
Source: Australian Tax Office.