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New changes to First Home Super Saver Scheme make home ownership more accessible for young Australians

Author: Zac Herps
2 min read
15 October 2019

Key Takeaways

  • Recent changes to the First Home Super Saver (FHSS) Scheme are worth investigating for individuals wanting to buy a home
  • A review on how the FHSS Scheme helps Australians save for a deposit for their first home through their superannuation fund.
  • Coupled with Queensland Health matching some voluntary contributions to superannuation for staff, this may be a golden opportunity for home ownership particularly for people working at Queensland Health

Individuals may be in a stronger position to save a deposit for their first home with recent changes announced to the national First Home Super Saver (FHSS) Scheme.

In short, the First Home Super Saver (FHSS) Scheme allows Australian residents the opportunity to request a release of voluntary contributions made to their super fund to put towards their first home.

Changes to the First Home Super Saver Scheme (FHSS) were passed in April 2019 and came into effect on July 1, 2019. It is important to note that the changes are retrospective and apply to FHSS contracts and release requests entered into from July 1, 2018.  The changes mean that first homebuyers are able to participate in the scheme for their first home if it is purchased in Australia and is their principle place of residence. Previously it applied to buying a first home anywhere globally.

Other notable changes include eligible participants having to apply and receive approval for FHSS funding before they sign a contract as opposed to having simply applying for the funds to be released and a change in timeframe to settle or recontribute the funds back into super.

There are eligibility conditions for the scheme, which includes a capped $30,000 withdrawal for a home deposit – a limit of $15,000 can be withdrawn from contributions from any one year for the scheme.

Broadly under the FHSS Scheme, an individual’s superannuation funds can only be drawn down for their first home which must be their principle place of residence for at least 12 months after purchase. They can apply for a 12 month extension after that but if the home is not bought within that period time, the funds must be invested back to the superannuation fund. It’s also a one chance only opportunity.

There are various other criteria and Rules surrounding the FHSS Scheme and advice should be sort as to whether you qualify and its applicability to your circumstances.

Why this is beneficial

The FHSS Scheme provides first homebuyers the opportunity to save money for a home deposit through their superannuation fund to take advantage of the concessional tax treatment afforded to superannuation funds but then in turn provide access to those funds before usual retirement age thresholds and other requirements that normally need to be satisfied before accessing funds from superannuation. It’s a unique opportunity.

This is of particular benefit to Queensland Health employees in light of Queensland Health’s commitment to matching some voluntary concessional contributions dollar to dollar to superannuation made by its staff. Please note there are various criteria and limitations on this and financial and taxation advice should be sort prior to taking any steps under the FHSS scheme.

We recommend anyone considering using the FHSS Scheme for a home deposit, seek legal advice and must seek independent taxation and financial advice from an authorised provider about their suitability and qualification for participation in the FHSS Scheme.

Feel free to contact me for more information.

The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.

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