The Federal Government introduced the First Home Super Saver Scheme in 2017.
They designed it to assist first home buyers to build a deposit for a home by taking advantage of the tax concessions available to monies held in superannuation.
Why the First Home Super Saver Scheme was introduced
The First Home Super Saver Scheme was introduced during the property boom when first home buyers were finding it difficult to get into the market due to rapidly increasing prices.
The intent was to help first home buyers build a deposit faster within superannuation as compared to traditional forms of saving.
Who can participate in the scheme?
The Scheme is aimed at those over 18 years of age who have never owned property (home, land, investment property, commercial property) in Australia.
If there are two or more parties, (couples, siblings or friends) intending to buy the home, each can participate in the Scheme.
How the First Home Super Saver Scheme helps you save!
The benefit for savers, is that contributions to superannuation are taxed at 15% when received by the Superannuation Company, not your marginal rate.
Added to this, earnings from the investments in superannuation are also taxed at a maximum concessional rate of 15%.
This compares to earnings on investments outside of superannuation that will normally be subject to tax at an individual’s marginal rate.
To get an idea as to how much more you could save via the Scheme use the Government Calculator below:
Saving to accumulate enough money to purchase your first home is always a challenge for most people.
The First Home Super Saver Scheme isn’t a magic bullet and there are strict conditions attached to it – however if you qualify, the tax concessions certainly help.
Doing a budget and working out how much you can afford to save is also an important step to ensure you can take full advantage of the opportunity.
The other critical element of buying a home, is to ensure your finance is truly market competitive and is tailored to your circumstances.
If you would like to understand what you can borrow, and on what terms, don’t hesitate to give me a call on 0421 304 990