First home super saver scheme
In this year’s budget the government announced plans to help Australians boost their savings for a first home deposit using their superannuation.
From 1 July 2017, individuals can make voluntary contributions to their superannuation account to purchase a first home. These contributions can be withdrawn for a deposit from 1 July 2018.
Up to $15,000 of voluntary contributions can be made in a financial year to count towards the amount that can be released.
The maximum amount that can be withdrawn is $30,000 in total of personal contributions plus an associated deemed earnings amount.
Many employees will be able to take advantage of salary sacrifice arrangements to make pre-tax contributions.
Individuals who are self-employed or whose employers do not offer salary sacrifice can claim a tax deduction on personal contributions, meaning savings effectively come out of pre-tax income.
However remember, any voluntary contributions under this scheme must be made within existing superannuation caps. The current concessional contributions cap is $25,000 in 2017-18. Concessional contributions are any pre-tax contributions plus the 9.5% employer contributions. The current non-concessional contributions cap (after-tax contributions) is $100,000 in 2017-18.
Concessional contributions and earnings that are withdrawn will be taxed at marginal rates less a 30 per cent offset.