Using your superannuation to save for your first home

2 min read

For Australians dreaming of buying their first home, there may be some good news. The Government announced the First Home Super Saver Scheme in the May 2017 Federal Budget and it applies to voluntary super contributions from 1 July 2017.

What is it?

The First Home Super Saver Scheme allows you to make voluntary super contributions of up to $15,000 a year or a maximum of $30,000 in total to your superannuation to use towards a deposit for your first home.  Voluntary contributions under this scheme must be made within existing super caps. The caps include any compulsory contributions you receive from your employer. Compulsory contributions cannot be used as part of your deposit. The total concessional (before-tax) contributions an individual can make, from both compulsory employer contributions and voluntary contributions, including those made under the scheme cannot exceed $25,000 in 2017/2018. When you buy your first home, you will be able to use the money you’ve voluntarily contributed for this purpose, plus any deemed earnings on it, towards your deposit. This applies to voluntary contributions made from 1 July 2017. If you suffer from financial hardship, you may still be able to access the scheme for a new home to buy (and live in), even if you have previously owned a home.

See the fact sheet outlining more details of the scheme.

Will it help me save for a deposit faster?

The Government estimates that for most people, the First Home Super Saver Scheme could boost the savings they can put towards a deposit by at least 30 per cent compared with saving through a standard deposit account1. This is due to the concessional tax treatment of superannuation and that the current interest rate on most deposit accounts is lower than the deemed interest rate that will be applied to your First Home Super Saver Scheme contributions2.

Check out the ATO estimator to see how much you can save by using the First Home Super Saver Scheme.

How do I access my contributions?

From 1 July 2018, you can apply to the Australian Taxation Office (ATO) when you are planning on purchasing your first home. The ATO will assess your eligibility and calculate your deemed earnings on your additional contributions2. Consider approaching the ATO as soon as you are starting to look to allow enough time for the ATO process of assessing and then releasing your money. The ATO will then notify your super fund as to how much of your super savings the fund can release to you, and any tax considerations for you to be aware of. More information on this process can be found on the ATO website.

Your super

Considering using the First Home Super Savers Scheme to buy your first home? You could consider using your BT Super account as part of your strategy – you don’t need a special account to access this scheme.

1 2017 Budget Speech   

² The amount of earnings that can be realised will be calculated using a deemed rate of return based on the 90 day Bank Bill rate plus three percentage points (as per the Shortfall Interest Charge).

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This information is current as at 18 January 2018. This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investment held in superannuation. The Government has set caps on the amount of money that you can add to superannuation each year on both a concessional and non-concessional tax basis.  There will be tax consequences if you breach these caps.  For more detail, speak with a financial adviser or visit the ATO website.

Any tax considerations outlined above are general statements, based on an interpretation of the current tax law, and do not constitute tax advice. The tax implications can impact individual situations differently and you should seek specific tax advice from a registered tax agent or registered tax (financial) adviser. 

Any projections are predictive in character. Whilst we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be affected by inaccurate assumptions or may not take into account known or unknown risks and uncertainties. The actual results actually achieved may differ materially from these projections.

This information may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be accurate at its issue date. It should not be considered a comprehensive statement on any matter nor relied upon as such. While such material is published with necessary permission, no company in the Westpac Group accepts responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, we intend by this notice to exclude liability for this material. BT Advisers are representatives of Westpac Banking Corporation ABN 33 007 457 141 AFSL & Australian Credit Licence 233714 (Westpac).  BT Advice is a Division of Westpac.