Effective 1 July 2017 the Australian Government introduced the First Home Super Saver Scheme FHSSS whereby voluntary superannuation contributions could be made into your superannuation fund to help build a deposit for the purchase of your first home.

The scheme was designed to assist first home buyers save for a deposit, by essentially putting extra savings into your superannuation fund (where it could not be touched) instead of keeping your savings in your main bank account.

How much

Each year individuals can make voluntary contribution up to $15,000/year. With a maximum of $30,000 per individual.

Eligibility

  • never owned a property in Australia
  • 18 years and older upon withdrawal of funds
  • live or intend to live in the purchased premises as soon as possible (and for a minimum 6 months of the first 12 months of ownership)
  • have not previously received a First Home Super Saver payment.

Pros

  • potential tax concessions
  • forced savings
  • couples can combine limits

Cons

  • risk of legislative change
  • administration delays and fees
  • slow access to funds

From 1 July 2018 eligible Australian’s are now able to apply for access to any voluntary contributions, which is starting to highlight the flaws in the administration system.

Triple J’s Hack program in August 2018 highlighted stories of first home buyers applying for the money to be released to go towards paying the deposit and due to delay in administration progress by either the ATO or superannuation fund the money was not released in time, meaning no deposit was able to be put forward and the property was snapped up by another buyer.

In today’s property market, some houses are being sold the day they are put on the market. Waiting up to 10 days for your deposit to be withdrawn from your superfund and received in your hands is unfortunately 10 days too late. Not to mention, the ATO will hit homebuyers with tax penalties if a contract is signed prior to receiving the funds.

The FHSS Scheme may not be suited to your circumstances and needs. Before making any financial decisions it’s important to carefully consider all the pros and cons. For more information, contact your superannuation fund administrator or financial planner.