As of December 2017 the average house price in Australia was $687,000, according to Australian Bureau of Statistics data, although this average is considerably higher in population centres like Melbourne and Sydney.
These prices make buying your first home a challenge for some, and impossible for others. To help make life easier for first home buyers the government introduced the First Home Super Saver Scheme in their 2017-18 Federal Budget.
How can the First Home Super Saver Scheme help you buy a house?
First Home Buyers Australia surveyed aspiring home owners and found the biggest barriers to purchasing a property are high house prices and saving for a deposit. The First Home Super Saver Scheme aims to make it easier for first home buyers to overcome these challenges by allowing them to save for their first home inside their super scheme. It is available as of 1 July 2018.
This scheme will be helpful for first home buyers because before-tax contributions to super are taxed at just 15 per cent. That means if you earn over $33,201 you'll pay less tax on the savings you put into super to buy your first home. If you're a high-income earner, your tax savings could be considerable.
When buying your first home you can apply to your super provider to remove up to $30,000 in contributions to go towards the purchase. You can withdraw a maximum of $15,000 in contributions made during any one financial year (meaning to withdraw the $30,000 maximum you must have been contributing for at least two years).
Are you eligible for the First Home Super Saver Scheme?
To be eligible to withdraw funds to buy property under the First Home Super Saver Scheme, you must fit a few basic eligibility rules.
These include:
- Be at least 18 years of age.
- Have never owned property before in Australia.
- Never previously requested to withdraw funds under the First Home Super Saver Scheme.
- You intend to live in the home for at least 6 of the first 12 months you own it and move in as soon as it is practical.
If you have owned a property before but have suffered a financial hardship resulting in the loss of that home, you may still be able to apply.
For more help understanding the First Home Super Saver Scheme and buying your first property, contact Edge Lending Solutions in Toowoomba.
