Access to super for first home deposit
From 1 of July 2017 it was announced in the Federal Budget 2017/2018 that First-home buyers will be allowed to make voluntary contributions (salary sacrifice) into their superannuation up to $30,000 in total over an individual’s lifetime and up to $15,000 per year to help them save up for a first home deposit. These contributions are taxed at 15 per cent.
This salary sacrifice contributions can be withdrawn any time after 1 July 2018. First home buyers will be allowed to withdraw the maximum $30,000 of contributions plus the earning generated from those savings to be used towards a first home deposit. The withdrawals will be taxed at an individual’s marginal tax rate, minus a 30 per cent offset.
The purpose of this incentive is to enable first home buyers to build a deposit faster and overall improve housing affordability, through the concessional tax treatment and the earnings obtained from superannuation. Use this online estimator provided by the government to help you understand how the advantages of saving for a home deposit through superannuation compares to saving the same amount using a standard deposit account www.budget.gov.au/estimator
According to Treasurer Scott Morrison in his budget speech “under this plan, most first home buyers will be able to accelerate their savings by at least 30 per cent”
Additionally couples can both access the incentive and can combine their savings to make a single deposit.
This First Home Super Saver Scheme will be administered by the ATO. The ATO will determine a person’s eligibility for release of super funds based on the information given by the applicant and only then can superannuation funds release request authorised by the ATO. The government would provide $9.4 million to the ATO to implement this measure.