Your guide to the First Home Super Saver Scheme (FHSS)

How does using super as your deposit work and will it work for you? Find out now and read our guide on the First Home Super Saver Scheme

Using super as part of your deposit

How does it work?

In order to assist first home buyers in cracking the property market, in the 2017–18 Federal Budget the Australian government introduced the The First Home Super Saver (FHSS) scheme.

Many Australians are having difficulty saving for a house deposit due to the lack of housing affordability. The FHSS scheme is designed to give first home buyers a leg up onto the property ladder by providing another way to save for a deposit, aside from asking one’s parents for money, moving in with said parents, or giving up avocado on toast for weekend breakfast with the parents (unless they’re paying).

From July 1, 2018 home buyers will be able to withdraw voluntary contributions made to their superannuation fund and put it towards a first home deposit.

As with most government incentives, the scheme comes with its fair share of rules. Let’s break them down.

  • Any super contributions you intend to put toward a house deposit must have been made after July 1, 2017 (so in the past year)
  • The property you intend to buy must be one you live in or intend to live as soon as practicable
  • You can use the scheme to purchase an investment property, as long as you live in the property for at least six months of the first 12 months you own it
  • You can only contribute a maximum of $15,000 a year and $30,000 in total.

The last point means that if you are planning to buy a house with a friend, family member or partner, you can combine your contributions so that the maximum you can contribute together from super saved is $60,000.

Will it work for me?

While surging property prices are unfortunately out of our control, many commentators are claiming the prospects for growth in the residential property market are the worst in 30 years. Morgan Stanley told The Australian Financial Review in April that National housing prices have fallen for the past six months and warned that annual growth is the lowest it’s been in more than five years.

So there’s that, combined with the FHSS scheme and and other deposit-saving hacks you can set your mind to, and things may be looking up for first home buyers.

Read: Your guide to buying your first home

Table showing "Hedonic home value index, March 2018"
uno is an online mortgage broker. The information above is general in nature, and you should always seek professional advice when making financial decisions.

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