As part of the 2017 Federal Budget the Treasurer announced the First Home Super Savers Scheme to assist first home buyers fast track their savings for a deposit to purchase their first home.
From the 1st July 2017, future first home buyers will be able to salary sacrifice into their super accounts additional funds over and above the 9.5% Super Guarantee Contributions their employers contribute to Super. Up to $15,000 can be contributed each year, up to a maximum of $30,000 in total.
The sacrificed contributions will be taxed at the normal contribution rate of 15%.The accrued amount can be withdrawn at any time provided the funds are used as some or all of the deposit towards the purchase of a first home. On withdrawal, the funds are taxed at your marginal tax rate, less a 30% tax offset.
For a couple, provided neither of you have owned a property before, this could mean up to $60,000 is available as a deposit towards the purchase of your first home.
One thing to be aware of though is, if you decide not to proceed with a first home purchase then the funds are trapped in your Super until retirement.
Whilst some of the media reports have suggested the Government’s cap of $30,000 is too low to be a meaningful amount to help first home buyers, which is the case in the Eastern States, here in South Australia, $30,000 will go a long way, if not cover completely, all of the deposit requirements for first home buyers.
Mark Lewis is the Managing Director of Bernie Lewis
This article is for general information only. Since everyone's personal financial situation is different this article can't be taken as financial advice. If you would like to discuss this article further or how it could relate to your personal financial circumstances please give us a call on (08) 8300-8300 so we can discuss it with you in more detail.