First home buyer super saver scheme and how much you could save in tax

If you want to save for your first home, you may be interested in the First Home Super Saver (FHSS) scheme. This scheme allows you to use some of your eligible voluntary super contributions to help buy your first home. These contributions can be before-tax (concessional), after-tax (non-concessional), or a combination.

The FHSS scheme has several benefits for first-home buyers. First, you can save faster by taking advantage of the lower tax rate on super contributions compared to other forms of saving. Second, you can earn a higher rate of return on your savings, as the associated earnings are calculated based on the shortfall interest charge (SIC) rate, which is usually higher than the average interest rate on savings accounts. Third, you can combine your savings with your partner's if you are both eligible for the scheme, which can increase your deposit amount.

However, there are also some rules and limits that apply to the FHSS scheme. You can only apply to have up to $15,000 of your voluntary contributions from any one financial year released under the scheme, up to a total of $50,000 contributions across all years. You must also meet the eligibility requirements, such as being 18 years or older, never having owned property in Australia before, and intending to live in the property for at least six months within the first 12 months after purchase. You must also apply for and receive a FHSS determination from the Australian Taxation Office (ATO) before signing a contract for your first home or requesting a release of your FHSS amounts.

If an individual contributed $50,000 towards superannuation over four years, this could be a tax saving of $16250.00 (based on an average marginal rate of 32.5%).

The FHSS scheme is a great option for first-home buyers who want to save more effectively and efficiently for their first home. If you want to learn more about the scheme, speak with us today.