Under the FHSS scheme, first-home buyers can use voluntary super contributions of up to $15,000 each financial year to assist with the purchase of their first home.
The key advantage is that you can end up paying less tax than you would saving for a deposit in a regular savings account.
It’s important to note that you can only withdraw money that you’ve contributed yourself to super — not contributions made by your employer.
There are three important things to know about voluntary super contributions:
- You can make an arrangement with your employer to salary sacrifice into super; or
- You can make a voluntary contribution from your after-tax income (such as existing savings) and claim a tax deduction when you file your tax return. To be eligible for the deduction, you need to fill out a “notice of intent” form, send it to your super fund and receive an acknowledgment.
- There is a cap on the amount of “concessional” or tax-advantaged contributions you can make each financial year. The cap is $25,000 for 2020/2021 financial year, but may be higher if you haven’t used the full cap in previous years. Importantly, the cap includes contributions by your employer. If you exceed the cap, you won’t get a tax break for voluntary super contributions. You can check your available contributions cap using the ATO’s service in your MyGov account.
At the moment, first-home buyers can withdraw a maximum of $30,000 of voluntary contributions under the scheme.
However, the Government recently announced changes, due to kick in from July 1, 2022, to increase the maximum releasable amount to $50,000.