Is First Home Super Saver Scheme Worth It?

Marketdeal on 02/07/2022 - 12:25
Last edited 02/07/2022 - 15:14 by 1 other user

Hi Folks, just wanna know, real time experiences of FHSS scheme.

How much did you really save on the scheme for a single person? Based on my understanding you will be taxed 15% at the time of your employer load the money to your super. And again when you withdraw the money it will be taxed again based on your tax brackets. My tax bracket is 37%)

I am planning to buy a house within two 2 years. But not decided place yet. Based on real estate market , I might or might not buy the house in my current job location as its very expensive in Sydney. (No plan to move any other city due the permanent role).

With all the conditions, like you must live in your property at least 6 months within first 12 months.

Based on my calculations I can load max 30k into this scheme within next 2 or 3 years. As I haven't done any voluntary contributions yet. I believe previous years limit will carry forward to this year.

Do you folks think its worth entering into this scheme with all the conditions and paperwork?
Does anyone able to get away with 6 moths stay condition? Any issues you have faced while withdrawing the amount from your super?

Appreciate sharing your experiences.

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  freefall101 on 02/07/2022 - 14:35

  There's a 30% tax credit when you pull it back out again. And remember it's only contributions you voluntarily make

  I wouldn't test the 6 months in 12 thing, the ATO will have tonnes of data on this and they're pretty tight on anything involving a superannuation scam.

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    Marketdeal on 02/07/2022 - 17:07

    Thanks for your time for replying. when you say tax credit, I need to pay 30% tax or no need pay. if I choose my employer to load the moneyis it's same?

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  anglais on 02/07/2022 - 15:16

  -1

  If I had my time again:
  - Load up FHSS to $45k over 3 tax years (tbf only just increased from $30k). Can do this in 13 months if you get the timings right with EOFY.
  - Buy a 1 bed apartment to avail the max first home stamp duty exemption
  - Live for 12+ months to satisfy all the primary residence requirements
  - Move out once I need space with partner/family/dog, keeping a good rental asset

  Not what you asked but just went on a tangent regarding the primary residence requirement!

  I have used FHSS and seems good to me but it's marginal.

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    Marketdeal on 02/07/2022 - 17:03

    Thanks for the suggestions, but I think I have already lost the chance for 2021. But isn't it first home stamp duty exemption only for new properties in NSW?

    • 

      supersaiyanpotato on 06/07/2022 - 17:03

      First home stamp duty exemption in NSW applies for existing properties under $650,000 saving you approx. 25k. This scales up as you go above this figure and zeros out at $800,000.

      Also they've changed it to 50k max on the FHSS for FY22 now.

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  Miss B on 27/07/2022 - 15:21

  I'm going through the process of buying my first home and came across your post while searching for other things. If you're looking to withdraw from 1July 2024 onwards your top tax bracket may actually be 30%, by the way, if your income is under $200k (Google tax rates 2025).

  I contributed the maximum $15k/year for 2 years. So I had $30k in contributions.
  - It was taxed at 15% = $25,500 I can withdraw
  - They then add "associated earnings" (don't know/care enough to check what this is) this made it $26,400.
  - Then my marginal tax rate is 32.5% + Medicare minus the 30% offset, so it is taxed at 4.5% = $25,212

  If this entire amount ($30k) would have been taxed at my marginal tax rate + Medicare (34.5%) and I put it in my savings account after paying tax I would only have saved $19,650. Ignore things like HECS as you will still need to pay that in the year you contribute it.

  The maths for yours shouldn't be too much different, unless the changes go ahead and the tax rates drop to 30% and you withdraw after that happens, you would then get the added benefit of delaying the tax until the tax rate is lower.

  Make sure you check all of the details and rules around the scheme so you fully understand it, but it can definitely boost your savings a bit if the scheme works for your circumstances.

  I'm going to withdraw mine in the next few weeks once my last couple of salary sacrifices are in my super, so I will have more insight into that then.

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    Silmo on 07/12/2023 - 22:20

    Thanks for the detailed information. It's really useful. Do you mind sharing your experience withdrawing from the super? Hope you're already staying in your new home by now :)

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      Miss B on 11/12/2023 - 22:39

      +1

      Not sure what info you're after. Withdrawing from super all went well. All of the amounts on the ATO site were correct. I do feel like it might have taken a few weeks. I did it early, after pre-approval, but prior to signing a contract. With the pre-approval they like to see the savings and I didn't find they were particularly familiar with the scheme, but I explained it, they got help from more experienced staff and we got there in the end.

      I've been in the bank's home for about a year now, no regrets, especially with how crazy the rental market is at the moment.

      Let me know if you have any questions, but no guarantees I will remember specific details from that long ago.

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        Silmo on 11/12/2023 - 23:59

        Appreciate your reply. It's great to know that the bank could also consider the FHSS amount that will be released as part of the pre-approval process.