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First home buyers saving for a deposit in their superannuation will soon have more time to access funds to complete, among other changes to the scheme.
First introduced in 2017/18, the First Home Super Saver Scheme (FHSSS) allows individuals to make voluntary contributions into the superannuation system and to later withdraw those contributions (and an amount of associated earnings) to use as a deposit for the purposes of purchasing or constructing their first home.
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Under the FHSSS, prospective first home buyers can make personal contributions to superannuation of up to $15,000 a year. Up to $50,000 of these contributions can then be withdrawn to finance a first home.
Under the existing laws, individuals have up to 14 days to request a release authority after they enter into a contract to purchase or construct a home.
However, new legislation was passed on Wednesday (6 September) that expands the time frame for FHSSS users to request a release of savings (after entering into a contract) in order to access funds to complete their house.
Individuals will have up to 90 days to request a release authority after they enter into a contract to purchase or construct a home.
The Treasury Laws Amendment (2023 Measures No. 3) Bill 2023 – part of a swathe of legislation that passed last week – also makes it possible for applications to amend and revoke their FHSS Scheme applications before receiving a FHSS Scheme amount and allows those who withdraw to reapply for FHSS Scheme releases in the future.
The bill also allows the Commissioner of Taxation to return any FHSS Scheme amounts to superannuation funds, provided the amount has not yet been released to the individual; and clarifies that FHSS Scheme amounts returned by the Commissioner of Taxation to superannuation funds are treated as funds’ non-assessable non-exempt income and do not count towards individuals’ contribution caps.
The technical changes generally apply retrospectively to FHSS Scheme applications made from 1 July 2018.
Speaking of the changes, Assistant Treasurer and Financial Services Minister Stephen Jones MP said the amendments would address “significant pain points in the scheme” and “[make] it easier for young Australians looking to purchase their first home through the First Home Super Saver Scheme”.
Mr Jones said: “The FHSSS was introduced by the previous government yet was plagued by administrative shortcomings including an inability to rectify application mistakes and inflexible time frames.
“Under the former government’s scheme, Australians were promised support to buy a home but were left stranded and disappointed. For around 4,000 Australians, this has left them unable to buy a home through the FHSSS.
“The changes will also apply to eligible individuals who applied from 1 July 2018, which will help Australians who engaged in the scheme in good faith, finally access the money they saved to purchase their first home.
“This is another example of how the previous government was big on announcement, but small on delivery. The Albanese Government’s focus continues to be on producing meaningful outcomes so that all Australians can get ahead.”
[Related: Bill to expand First Home Super Saver Scheme delayed]
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