Tax concession for first home buyers
From 1 July 2018 eligible first home buyers will be able to withdraw voluntary super contributions (which they've made since 1 July 2017), along with associated investment earnings, to put toward a home deposit.
How does it work? Under the First Home Super Saver Scheme (FHSSS), first home buyers who make voluntary contributions of up to $15,000 per year into their super can withdraw these amounts, in addition to associated earnings, from their super fund to help with a deposit on their first home.
If eligible, the maximum amount of contributions that can be withdrawn under the scheme is $30,000 for individuals or $60,000 for couples.
Voluntary contributions can be made by salary sacrificing from before-tax income, by making personal tax-deductible contributions, or by making personal after-tax super contributions.
When the money is withdrawn, before-tax and tax-deductible contributions are taxed at your marginal tax rate, less a 30% tax offset, while after-tax contributions aren’t subject to tax.
Due to the favourable tax treatment, generally available through super, this scheme intends to help first home buyers grow their deposit more quickly.
The first home buyer must reside at the property for at least six months in the first 12-month period from when it can be occupied.
Speak to one of our recommended Financial Advisors as additional rules may apply to your situation, so make sure you do your research before making any decisions.
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