First Home Super Saver (FHSS) Scheme
First home buyers can take advantage of the FHSS Scheme and use their Virgin Money super account to help them save for a house deposit.
Under the FHSS Scheme first home buyers can make voluntary concessional (eg. before-tax) or non-concessional (after-tax) contributions to their super account which they can later withdraw along with any associated earnings for use as a house deposit. These voluntary contributions will also count towards your usual concessional and non-concessional contributions caps.
The beauty of the scheme is that voluntary concessional contributions get the same tax benefits of super as they are effectively taxed at 15%, rather than your marginal tax rate. The associated earnings on contributions eligible for the FHSS Scheme are also taxed at 15%. Although withdrawals of concessional contributions and any associated earnings under the FHSS Scheme are subject to tax at your marginal tax rate, a tax offset of 30% is available which means that you may pay less tax overall.
Under the FHSS Scheme, eligible contributions are capped up to $15,000 in a single year and from July 2022 increase from $30,000 to $50,000 across all financial years.
Couples, siblings or friends purchasing the same property can each access their own eligible contributions for their combined deposit.
If you’re only considering buying your first home, but you’re not sure; you may want to think twice before jumping on board. Why? Because if you change your mind, you can’t get your additional contributions back until you reach retirement age or otherwise meet a condition of release.
We recommend you seek your own tax and financial advice to make sure the FHSS Scheme is right for your personal financial situation, needs and objectives.
How to contribute
There’s two ways you can make voluntary concessional contributions to your account:
- Salary sacrifice: if you’re working you can make extra contributions to your super from your before-tax income. Download the Salary Sacrifice form and give it to your employer to set up before-tax contributions
- You can make an after-tax personal contribution to your Virgin Money Super account online anytime. Login to your account and go to Personal Details to find your BPAY® details. Note: If you intend to claim a tax deduction for your after-tax personal contributions, you must notify us by filling out the notice to claim form
How to withdraw your contributions to buy a house
When you’re ready to buy your first home, you can apply to release your savings with the ATO, for any amount up to your maximum release amount (your additional contributions plus any associated earnings). There are strict rules around eligibility and how you must use your funds as well as potential additional tax. Visit the ATO website for more info.
Make sure it’s right for you
To learn more visit the ATO website. Alternatively call us on 1300 652 770 for Simple Super Advice, at no additional cost. We’re here Monday to Friday, between 8am to 6pm AEST.