First Home Super Saver Scheme (FHSSS)

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Interest rate announcement – September 2019
In July, the Reserve Bank of Australia (RBA) reduced the official cash rate by 0.25% to a record low of 1.0% in an effort to help support employment growth and increase inflation. This month the RBA have left the cash rate on hold at 1,00% and continue to monitor the economy closely. The inflation rate is currently 1.3% which is below the RBA’s ideal range of between 2% and 3%.

The Federal Government introduced the First Home Super Saver (FHSS) Scheme to help first home buyers build a deposit for their first home. The FHSS Scheme is intended to help first home buyers save a deposit for their first home tax effectively through their super.

Who is it available to?

  • be a permanent resident over 18 years of age;
  • have never owned any real property in Australia (this includes part ownership, ownership of commercial property and ownership of land); and
  • have never used the FHSSS before

How does it work?

  • The FHSSS works by giving you access to additional personal contributions that you make to super (up to a maximum of $15,000 per financial year and a total maximum of $30,000 of contributions). These contributions can come from either pre-tax contributions, known as concessional contributions (these are generally either salary sacrifice contributions organised through your employer or personal deductible contributions) which are taxed at 15%, or after-tax contributions. Only personal contributions made since 1 July 2017 can be used for the FHSSS.
  • When you come to buy your first home, the ATO allows you to release a portion of your super balance equal to some or all of the personal contributions you have made plus a deemed earnings rate.
  • You can buy an existing dwelling in Australia (house, townhouse, apartment) or you can buy land with the intent to build on it. You cannot use FHSS Scheme funds to purchase a motor home or houseboat.
  • You are required to live in the property as soon as possible and must live in it for at least 6 months in the first 12 months.

Applying to release your FHSSS funds

1. Request FHSSS determination from the ATO

The first step is to request a determination from the ATO. This will tell you the total maximum that can be released from your super at the time. Importantly, you must request this determination before you sign the contract.

2. Request release of FHSSS funds

Once you have received a determination from the ATO, you can apply to release the funds through the ATO. Before doing this, you should:

  • check you have made all of the voluntary contributions that you wish to count towards the FHSSS;
  • make sure you agree with the amounts shown on the FHSSS determination. If there are any issues with the determination, you need to resolve these through the ATO’s review process before applying to release the funds.

3. Notify the ATO

You must notify the ATO of your purchase. The timing of the notification depends on when your contract is signed as follows:

  • If you sign the contract before making a release application, you need to apply to release your FHSSS within 14 days of signing the contract.
  • If you have not signed the contract when you apply for the release, you have 12 months to sign a contract or request a further 12 month extension to find a home. Once you find a home, you must notify the ATO within 28 days of signing the contract.

Things to be aware of

  • You can only apply to release your FHSSS fund once.
  • After you apply to release the funds, it will usually take 15-25 business days for you to receive the funds.
  • If the funds are released to you and you subsequently decide not to proceed with purchasing a home, you can choose to either recontribute the amount back to super or keep the funds and pay an additional 20% FHSSS tax on that amount.

If you would like more information on how you could use the FHSSS, contact us!

Our Current Best Interest Rates

The best home loan rates we currently have available:

  • Variable rate of 3.18% pa (comparison rate: 3.21% pa)
  • 1 year fixed rate of 2.98% pa (comparison rate: 4.62% pa)
  • 2 year fixed rate of 2.98% pa (comparison rate: 4.47% pa)
  • 3 year fixed rate of 2.99% pa (comparison rate: 3.79% pa)
  • 5 year fixed rate of 2.99% pa (comparison rate: 3.77% pa)

Assumptions: <$400,000 loan, owner-occupied purchase, principle & interest, LVR < 80%.

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