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First home buyers may access up to $50,000 of super money

News Finance Superannuation

30 June 2022 5 min read

First home buyers may be eligible for extra help to enter Australia’s housing market by being able to access up to $50,000 through the First Home Super Saver Scheme.

The maximum amount of voluntary super contributions able to be released under the First Home Super Saver Scheme increased from 1 July 2022 to $50,000 of contributions, plus associated earnings, that eligible aspiring first home buyers may be able to put towards a home deposit.

The Australian Government said at the time it was expanding the First Home Super Saver Scheme to help more young Australians to potentially achieve the dream of home ownership.¹

Your guide to the First Home Super Saver Scheme (FHSSS)

The FHSSS was first announced by the Government in the 2017-18 Federal Budget to reduce pressure on housing affordability.

The scheme aims to help Australians save for a first home using extra voluntary contributions² into their superannuation fund.

It allows first home buyers to save money for a first home inside their super fund, which aims to help them save faster with the concessional tax treatment of superannuation, according to the Australian Tax Office (ATO).³

How much of your super money can you access?

If you are eligible, you may be able to release up to $50,000 of contributions from your super towards buying a home.

Since 1 July 2017, you have been able to make voluntary contributions, including concessional (before-tax) and voluntary non-concessional (after-tax) contributions, into your super fund to save for your first home.

There are eligibility requirements you must meet to apply for the release of the money.

It is important to read the detailed facts provided by the ATO before making a decision to utilise your super fund for first home savings.

Your FHSSS questions answered

Do you have to be a first home buyer to use the FHSSS? Show content

No. You may still be eligible in limited circumstances even if you have previously owned property in Australia.

When the legislation was first proposed, it was limited to apply only to first home buyers, however it now may also apply if the ATO determines that you have suffered a financial hardship that resulted in a loss of ownership of all property interests.

So, you may be eligible if you’re at least 18 years old, and you:

have never owned property in Australia – this includes an investment property, vacant land, commercial property, a lease of land in Australia, or a company title interest in land in Australia (unless the Commissioner of Taxation determines that you have suffered a financial hardship)
have not previously requested the Commissioner to issue a FHSS release authority in relation to the scheme.

How would I pay the extra money in to superannuation? Show content

You can make voluntary contributions into your super fund with the intention of using that money for your home deposit, as either a concessional contribution (before tax) or a non-concessional contribution (after tax).

When could I start paying the extra money in? Show content

You have been able to pay the money in since 1 July 2017.

How much can I take back out? Show content

The maximum amount that can be released under the scheme is the sum of your eligible contributions up to a maximum of $50,000, plus deemed associated earnings. This amount includes:

100% of eligible non-concessional contributions
85% of eligible concessional contributions
Associated deemed earnings - calculated on these contributions using a deemed rate of return.

It is important to note that the maximum amount that can be released is not necessarily the actual amount you will receive from the ATO. See ‘‘How can I take the money out’’ below for further information.

How can I take the money out? Show content

You can apply to release your voluntary contributions along with the associated deemed earnings to help you purchase your first home. To withdraw the accumulated funds from your super fund:

1

Apply to the Commissioner of Taxation for a FHSSS determination and release. You can do this online via your myGov account.

2

Once you have received your determination, apply to the ATO for a release of your savings.

3

The ATO will issue a release authority to your super fund/s, who will send the requested release amounts to the ATO.

4

The ATO will withhold the appropriate amount of tax and offset against any outstanding Commonwealth debts.

5

The ATO will then send the remaining balance to you.

It’s important to note that the ATO must have released a FHSSS amount to you before you sign a contract to purchase or construct residential premises or you may be liable to pay FHSSS tax.

Can I apply to release super funds more than once? Show content

No. Once you have requested a release you can't request another one, even if you have requested an amount less than your FHSSS maximum release amount.

What kind of home can the FHSSS apply to? Show content

The FHSSS applies to residential premises – but not houseboats or mobile homes. It could include vacant land if you’re going to build on it, but the land must be capable of being occupied as a residence.

Importantly, you must live there. You must move in as soon as it’s practical and live there for at least six months of the following 12 months. This is to avoid the money being used to buy an investment property.

How long would I have to buy a home? Show content

Under the FHSSS, you have 12 months after releasing the savings to sign a contract. You would also be able to ask the ATO for a 12-month extension.

What if I don’t end up buying a home? Show content

Under the FHSSS, if you don’t end up buying a qualifying home within the 12-month timeframe, you must either:

apply for an extension of time, up to a maximum of an extra 12 months
re-contribute the released amount back into superannuation
keep the amount and pay a tax penalty equal to 20% of your assessable FHSSS amounts released.