There's a scheme called the First Home Super Saver (FHSSS) that you might’ve heard about. It's a bit of a tongue twister but it’s a way to save for a deposit on your first home using your super account.
Depending on how much you can regularly put aside, saving for a deposit can be a big challenge for prospective homeowners. The government introduced the FHSSS as a method for saving that may help you reach your goal faster than if you put money into a savings account.
Keep an eye out for our upcoming webinars about the FHSSS.
What are benefits of the FHSSS?
According to the government, using the FHSSS could help you to boost your deposit by at least 30%1 compared to using a standard deposit account.
This is thanks to the potential tax advantages in super. Before-tax contributions paid into super are taxed at 15%. This is often substantially lower than your marginal income tax rate, which means you're able to put away more on a regular basis than if you'd directed a portion of your after-tax income to savings.
You’ve also got the potential to earn higher returns on your super than you do in a standard bank account. Tax advantages and potentially higher earnings mean you’re able to get to your savings goal faster through this scheme than via alternative methods.
How does the FHSSS work?
The amounts you save (and later withdraw to buy your home, along with associated investment earnings) must come from voluntary contributions by you, not the regular contributions made by your employer.
This is money you've voluntarily contributed on top of the normal amount that goes into your super fund whenever you're paid. This means that you're able to build up a deposit for your first home without undercutting your retirement savings.
To help save for a first home, singles can contribute to their super account under the FHSSS:
- up to $15,000 per year, or
- $50,000 over their lifetime.
How do I withdraw my super to buy a house?
When you’re ready to withdraw the money from your super account under the FHSSS, you can apply to the Australian Taxation Office (ATO). The ATO will work with you and Hostplus to calculate how much you’re entitled to and help you withdraw the money from your super account to buy your first home.
For more information about applying to release your savings please visit the ATO FHSSS webpage.
Am I eligible for the FHSSS?
Participants in the FHSSS must:
- be 18 years or older
- have never owned a property in Australia before, and
- have never previously requested a release authority in relation to a FHSSS determination.
If you have owned a home before and suffered a financial hardship, you may still be eligible to participate in the FHSSS, subject to the ATO’s approval.
Easy ways to make a super contribution to Hostplus:
- The Hostplus app. Download the app or search for ‘Hostplus’ on Google Play or Apple App Store.
- Log in or register at Hostplus Member Online. You’ll need your member number to register.
- BPAY®. Find your BPAY details in Member Online, on the Hostplus app, or on your Hostplus statement.
- Direct debit from your bank account. Just fill out the Direct Debit Authority form.
There are rules about the type and amounts of super contributions that you can make under FHSSS.
Before starting an FHSSS strategy to save up for your ideal property, think about:
- How much extra money do you need to contribute to achieve your goals?
- What kind of contributions will you make – before tax or after-tax contributions?
- When will you be able to withdraw your funds?
Help from Hostplus is on hand
There are lots of things to think about when considering using the FHSSS. You're not alone though. Hostplus offers a financial planning and advice service.
Advisers can help you to understand how this strategy works and provide advice based on your personal situation. They consider the whole picture with the aim of putting you in a better financial position. Hostplus can help you to realise your dream of home ownership.
How can I find out more about the FHSSS?
A detailed list of conditions and eligibility criteria is available on the ATO's website here. Remember you don’t have to move forward by yourself.
We also offer free webinars about the FHSSS.
Remember, Hostplus superannuation advisers can help you determine whether the FHSSS is right for you and how it could help you save for a deposit sooner.
Contact our advice support team on 1300 303 188 or use our online contact form to book an appointment with one of our Hostplus Superannuation Advisers.
1. Source: https://treasury.gov.au/sites/default/files/2022-03/first-home-super-saver-scheme.pdf
Issued by Host-Plus Pty Limited ABN 79 008 634 704, AFSL 244392 as trustee for the Hostplus Superannuation Fund (the Fund) ABN 68 657 495 890, MySuper No 68 657 495 890 198. All information provided is current as at 30/06/23. This information is general advice only and does not take into account your personal objectives, financial situation or needs. Before making a decision on whether to acquire a Hostplus product or service you should read the relevant Hostplus Product Disclosure Statement (PDS). For a description of the target market, please read the Target Market Determination (TMD). You may also find it beneficial to obtain advice from a licensed financial adviser.
Hostplus has engaged Industry Fund Services Limited (IFS) ABN 54 007 016 195, AFSL 232514 to facilitate the provision of personal financial advice to members of Hostplus. Advice is provided by financial planners who are Authorised Representatives of IFS. Fees may apply for personal financial advice; for further information about the cost of personal advice, you can speak with your financial planner or visit our website. Information to help you decide whether you want to use personal financial advice services being offered is set out in the relevant IFS Financial Services Guide, a copy of which is available from your financial planner.