Revisiting the First Home Super Saver Scheme

24th February 2022

For many years, the Government has recognised that people find it increasingly difficult to save for a first home deposit to enter the property market.

Under the FHSS scheme, a person makes voluntary contributions to super (within limits) on a pre- or post-tax basis. Contributed amounts remain in the fund (with a maximum 15% tax on earnings) until the person withdraws to purchase or construct their first home. The contributions benefit from the relevant tax concessions upon entry (e.g. made on a pre-tax basis for salary sacrifice and/or personal deductible contributions) and are subject to existing contribution caps. When the person is ready to purchase or construct their first home, contributions are released (plus a proxy amount of earnings meaning the ATO isn’t required to calculate actual earnings), taxed at concessional rates (or nothing at all for after-tax contributions), and put towards the home purchase and/or construction.

Sounds simple right. Well, not necessarily. Some quirks to the scheme can trip up clients (and their advisers) if they aren’t careful.

In this Technical Journal, we look at some of the main points and considerations of the FHSS scheme.

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