What is the First Home Super Saver Scheme?

If you’re a first home buyer, it’s a new and innovative way for you to build your deposit.
In a nutshell, it’s designed to help you boost your savings by allowing you to build your deposit via your super account.

What’s so good about it?

It could increase the savings you put towards a deposit by around 30%, compared to saving through a standard bank account*. And we think that this is awesome.

So how does it work?

You simply make extra contributions into your super and then withdraw them, plus the earnings, to put towards your deposit.

How do I make contributions into my super account?

There are a few ways.
1. The easiest way is to get your employer to deduct the contributions from your pay, either before tax, known as salary sacrifice (which reaps the best tax advantages -more on this below) or after tax.
Just so you know, before tax contributions are referred to as a concessional contributions. And after-tax contributions are referred to as non-concessional.


2. You can make contributions via BPay.  These will be made after tax and, so they will be non-concessional.

Is there a limit as to how much I can contribute?

Yes, there is. The maximum amount you can contribute towards your deposit each year is $15,000. And the maximum amount you can contribute towards your deposit in total is $30,000. 

Bear in mind that there are limits to the amount of money that can be paid into your super overall each financial year. 

A total of $25,000 can be put into your super before tax each financial year.  This includes your employers’ contributions, your before tax contributions as well as any contributions you claim a tax deduction for.  These are the concessional contributions.

A total of $100,000 can be contributed into your super after tax each financial year. These are non-concessional contributions.

If you are in a relationship and your partner is also a first home buyer, then you can each make contributions to your super accounts, raising your total deposit to a maximum of $60,000.

It’s all about the tax

If you were to use a standard bank account to save for your deposit, the money you’d put in would be after you’ve paid tax. 

However, if you put the money into your super account as a pre-tax contribution then you would only pay 15% contributions tax, which is a lot lower than what you’re probably paying in income tax.

And because the money is taken straight out of your pay, you may not even notice the impact on your pay each week/fortnight.

Let’s say you earn $50,000 p.a. and salary sacrifice $5,000 p.a. An annual salary sacrifice contribution of $5,000 would reduce your take home pay by only $3,200 p.a.
(Please note that your contributions must be made within existing superannuation caps mentioned above).

After 6 years of saving, an estimated $27,639 will be available for a deposit under the First Home Super Saver Scheme. This is $7,795 more than if the saving had occurred in a standard deposit account.

Source: http://budget.gov.au/estimator/

If you’re self-employed you can claim a tax deduction on contributions you make after tax by BPAY.  This means that your savings effectively come out of your pre-tax income.
And the good news is, if your employer does not agree to a salary sacrifice arrangement, you too could make after tax contributions and then claim a tax deduction.

You can also make contributions from your take home pay. Although you won’t get a tax concession up front, when these contributions are withdrawn they won’t be taxed – and you may receive a Government Co Contribution if you earn under $51,813 per annum (for 2017/18).

Who isn’t eligible?

People who want to purchase the following type of properties:
• Investment property
• any premises not capable of being occupied as a residence
• a houseboat
• a motor home
• vacant land (that they don’t want to build on).

Important note: if you have previously owned property in Australia, you may still be eligible if the Commissioner of Taxation determines that you have suffered a financial hardship. Regulations around the definition of what constitutes ‘financial hardship’ have not yet been released by the Government. We will keep this webpage up up-to-date as information is provided.

When can I start contributing and when can I withdraw my deposit to buy my new home?

Any personal or salary sacrifice contributions made since 1 July 2017 can be withdrawn from 1 July 2018 onwards.

When you’ve found the place you want to buy, you can withdraw your savings by applying to the Australian Taxation Office (ATO).

The ATO will calculate the amount you can withdraw and any tax payable on withdrawal.

If you’re interested in the scheme and would like more information, then we have superannuation specialists ready to answer your questions. Just give us a call on 1300 361 477

If you would like to read more information about the scheme, visit the ATO website.

Ok lets get started

To make additional contributions to your super, simply complete a Payroll Deduction form and hand to your employer. You will need to select before or after-tax payments and nominate an amount.

If your employer does not agree to making additional contributions for you, you can make personal contributions by BPAY.

*Source: http://budget.gov.au/estimator/


Contribute by payroll deduction

Email your employer