How to use your super to buy your first home

If saving for your first home is on your list of New Year’s resolutions for 2018, you might want to investigate the federal government’s new First Home Super Saver Scheme.

Announced in the 2017-2018 budget, and introduced into Parliament in early September, the scheme essentially allows individuals to make additional contributions into their super accounts that can later be withdrawn to buy their first home.

More than just a way to “put it away where it can’t be touched”, the benefits of the scheme lie in the tax breaks that potentially allow you to save for a deposit much faster than you could with a standard savings account.

How it works

From 1 July 2017, first home buyers can make voluntary contributions up to $15,000 per financial year, culminating in a maximum withdrawal of $30,000 for a home deposit.

You can start making contributions now, with withdrawals allowable after July 2018.

Contributions can be:

• undeducted post-tax personal contributions;
• deducted pre-tax personal contributions;
• salary sacrifice contributions.

To find out which is best for you, please see your accountant.

The tax breaks

The above super contributions are taxed at just 15 per cent, rather than paying (for example) 30 per cent tax and then putting the money into a savings account. You may also be able to decrease your taxable income (and save on end of financial year tax) at the same time.

Another benefit is the potential higher rate of earnings that can be achieved with your contributions (profits on your investment). And when it comes time to withdraw, the withdrawal is taxed at a marginal tax rate less a 30 per cent offset.

It’s estimated that most first home buyers could boost their savings by at least 30% compared to traditional saving in a standard deposit account. If a couple were buying their first house together, both could make use of the scheme and essentially save upwards of a $50,000 deposit over a few years.

For more information about the scheme, read the fact sheet. To find out how much you could save (in terms of tax and your deposit), check out the First Home Super Saver Scheme Estimator tool.

Securing your first home loan

If you’re a first home buyer and are not really sure where to start, pop into one of your local Community Bank® branches.

We can help you make sense of the First Home Owners grant (including how to apply), determine how much you will need to save for a deposit, and shed light on any part of the purchasing process you might be struggling with.

As part of our ‘Own Your Happy Place’ campaign, first home buyers also pay no upfront fees when they take out a home loan, and get access to very competitive interest rates.

For more information, visit your local Canberra Community Bank branch in:

Curtin: 1/20 Curtin Place, Curtin. Ph: 6260 5140

Jerrabomberra: 2a/2 Limestone Dr, Jerrabomberra. Ph: 6299 8357

Wanniassa: Wanniassa Shopping Centre, Sangster Place. Ph: 6231 9024

Calwell: Calwell Shopping Centre, Webber Crescent. Ph: 6291 3385

Please remember to consult your accountant or financial adviser before making any significant financial decisions.

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