The First home super saver (FHSS) scheme was introduced by the Australian Government in the Federal Budget 2017–18 to reduce pressure on housing affordability.
Under the FHSS scheme you can apply to have your voluntary contributions released from your superfund up to maximum of $15,000 regarding from any one financial year or up to a total of $30,000 voluntary contributions across all years.
Eligibility
- assessed on an individual basis
- start making super contributions from any age.
- never owned property in Australia
- not previously requested the Commissioner to issue a FHSS release authority in relation to the scheme.
- you must be 18 years old or older when requesting a determination or a release of amounts under the FHSS scheme
- You may still be eligible even if you have previously owned property in Australia, if the Australian Taxation Office determine that you have suffered a financial hardship that resulted in a loss of ownership of all property interests.
Before you start saving you should
- check that your nominated super fund (or funds) will release the money
- ask your fund about any fees, charges and insurance implications that may apply
- check that your super fund has your current contact details – ensure your name matches with the Australian Taxation Office
- be aware that if you receive FHSS amounts, it will affect your tax for the year in which you make the request to release. You will receive a payment summary, and you will need to include both the assessable and tax-withheld amounts in your tax return.
If you want to be considered under the financial hardship provision then you should ask the Australian Taxation Office to determine if the financial hardship provision applies to you before you start saving.
Contributions
- must be voluntary contributions and may be concessional contributions and/or non-concessional contributions
- voluntary superannuation contributions form part of your contribution cap limits for superannuation contributions
Benefits
- tax benefits under salary sacrifice arrangements and still access monies in the superfund for house deposit up to $30,000
- earnings are taxed at 15% in the superfund
- 30% offset on withdrawals whereas the tax on the original contribution was only 15%
Things to know
You must apply for and receive a FHSS determination from the Australian Taxation Office before signing a contract for your first home or applying for release of your FHSS amounts.
You can only apply for release of your FHSS amounts once.
You have 12 months from the date you make a valid request for release of your FHSS amounts, to do one of the following:
- Sign a contract to purchase or construct your home (you must notify the Australian Taxation Office within 28 days that you have signed the contract)
- Recontribute the assessable FHSS amount (less tax withheld) into your super fund and notify the Australian Taxation Office within 12 months of the release request date that you have recontributed
You must include the assessable FHSS released amount and the tax withheld amount shown on your payment summary in your tax return for the year you request the release.
Non-compliance with Australian Taxation Office requirements or choosing to keep the FHSS money, will subject you to the FHSS flat tax equal to 20% of your assessable FHSS released amounts.