Buying a new home isn’t easy, especially for first home buyers. They don’t have a property to sell or an established credit history that includes paying off big mortgages. The government has introduced several programs to help these buys and make the purchase process easy. One of these programs is the First Home Super Saver Scheme. This allows buyers to make voluntary contributions to their Superannuation fund with the intention to withdraw them for new home purchase down the line. Here are some things you need to know about voluntary superannuation contributions and the benefits of this scheme:
1. When and how much?
You can start making voluntary contributions at any time as long as you have a superannuation fund. The scheme has been open since 1st of July, 2017. Investors are allowed to contribute as much as $15,000 per annum and $30,000 overall. If you’re buying property with someone like a parent, sibling or spouse, they can take advantage of this scheme as well.
Your funds will be invested according to previous superannuation fund instructions and FHSS return will be calculated on the basis of the deemed rate. The contributions will get healthy returns despite market conditions.
You can withdraw the funds precisely one year from the scheme launch date. That means the funds are accessible from 1st of July 2018. The withdrawal amount is calculated based according to relevant taxes, returns, and other such factors.
4. Using the funds to purchase a homeThese contributions, along with other savings, can be the deposit or down payment for your new home. You just need to submit an application to the Australian Taxation Office for a withdrawal. This money can’t be used to purchase investment property and you must live in it for at least 6 months in a year after the purchase (as long as the property is liveable).
If you want to know more or are interested in our services here at Conveyancing Baulkham Hills, feel free to contact us through our form or call on 61-2 9686 3366