Say you are earning $60,000. You want to put $10,000 of that salary (pre-tax) towards your home deposit. If you pay tax on that as normal and then put it in a normal bank savings account, you will pay around $3,250 of the $10,000 in tax.
Now, if you put that $10,000 in the FHSSS [super] Account B instead, you will be taxed at just 15%. This means you will only pay around $1,500 in tax. That’s a substantial amount of extra money towards your first home instead of towards your tax bill.
When you withdraw your money, you will get taxed at your marginal tax rate of 32.5% minus an offset of 30%. In effect, you’ll also pay 2.5% tax when you withdraw your money. This loss will be cancelled out somewhat by the fact that [super] Account B earns above 3% interest while you have your money in it which, again, is better than most regular bank accounts.
Conditions:
The FHSSS is open to anyone who has never owned a property before. If you’ve owned or co-owned investment properties, not just properties that you may have lived in you are excluded from the scheme. You’re also excluded if you’ve bought vacant land previously, even if there’s no home on it. You can also only use the scheme once.
To get your contributions into Account B out when you want to buy, you have to be over 18. And the funds must be used to buy a home, and cannot be used for other dwellings like caravans, motor homes or houseboats, or vacant land. If you do want to buy vacant land, then you must be able to enter the contract to build a home on it within 12 months of receiving your savings.
To stay eligible for the First Home Super Save Scheme and not end up with a nasty tax bill after receiving your money, you must actually live in your first home for at least six months of the first 12 months you own it. This is similar to the conditions for the first home buyer’s grants offered by some states.
You can also contribute a maximum of $15,000 in a single year. In addition, you can only contribute a maximum of $30,000 in total across all years to your FHSSS savings accouny