First First Home Super Saver scheme tax year deadline approaching

Savers for their first home have under a fortnight to start their savings and tax advantage during the current financial year under the recently introduced First Home Super Saver (FHSS) scheme.

FHBs have been advised in the countdown to the June 30 end of the tax year, there are advantages to start putting money in this financial year.

The FHSS scheme is based around making contributions to your superannuation fund to save for your deposit.

Contributions to superannuation are taxed at 15%, which is typically lower than your marginal tax rate, meaning more of your cash is saved and less is going to the ATO. There is a limit of $15,000 per tax year.

The FHSS was introduced by the Australian Government in the Federal Budget 2017/18 to reduce the pressure on housing affordability.

It allows FHBs to save money for your first home inside your superannuation fund.

The idea was to help first home buyers save faster with the concessional tax treatment within super.

From 1 July 2017 you can make voluntary concessional (before-tax) and non-concessional (after-tax) contributions into your super fund to save for your first home.

From 1 July 2018 you can then apply to release your voluntary contributions, along with associated earnings, to help you purchase your first home.

This scheme is suitable for first home buyers if:

• you either live or intend to live in the premises you are buying as soon as practicable
• you intend to live in the property for at least six months of the first 12 months you own it, after it is practical to move in.

You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $30,000 contributions across all years.

You will also receive an amount of earnings that relate to those contributions.

For more information click here.