Purchasing your first property in the ACT

The FHSS is designed to help buyers get a foot on the property ladder, while also providing a useful tool for saving for a deposit on a home. The scheme makes it possible for first home buyers to take up to $50,000 from their super, in order to cover the costs of the deposit. There are restrictions, however.

Only super that you have voluntarily contributed (and its associated earnings) can be accessed.

The good news is, some voluntary contributions are taxed at a lower rate than income tax, making it easier to save.

The ACT does not have first home buyer grants but tax concessions on saving through FHSS can help.

To access the FHSS, you need to have deposited your own money into your super account first.

On the plus side, before-tax voluntary contributions to your super attract a reduced tax rate of only 15% instead of the higher tax rate you’d otherwise pay on your income.

The two main ways to make before-tax contributions are:

• Salary sacrificing - your employer diverts some $ to your super from your salary, and
• Contributing from your take home pay and then claiming a deduction at tax time.

Either way, you save by paying less tax.

You can also make and use any after-tax contributions you make to your super.

Note, there are limits on how much you can contribute to your super each year.

1. Check you’re eligible for the FHSS – are you 18 years old or over and a first home buyer? There’s no Australian citizenship or residency requirement to apply.
2. Check that your super fund allows you to withdraw under the FHSS (Spaceship Super does!)
3. Start out by contributing to your own super in any of the following ways:
   1. Contribute after-tax money to your super and then a claim tax deduction in your tax return.
   2. Salary sacrifice, by asking your employer’s payroll department to send some of your income directly to your super account instead of to you.
   3. Contribute after-tax money to your super account, without claiming a tax deduction.
   • Options a and b count towards your ‘concessional contributions’ annual cap of $27,500 (including your employer contributions) and come with tax savings.
   • Option c counts towards your ‘non-concessional’ annual cap of $110,000.
   • There’s a $15,000 cap on how much you can save via the FHSS each year. 
4. Think financial years. Your annual limits reset on 1 July every year. 
5. When it comes time to start looking for a home, you apply for a FHSS Determination and a release from the ATO.
   Make sure you get the determination before you sign a contract, so you know how much you’re able to withdraw as a deposit.
   Much of the information will be pre-filled, but it will be handy to have a record of your contributions on hand just to check.
6. Buy your property!
   Once you sign a contract, submit an FHSS Release Request.
   The ATO requires this within 14 days of signing the contract, but it’s best to do it straight away.
   The amount you withdraw via FHSS will be paid into your bank account. In most cases it will take between 15 to 25 business days.
7. Alternatively, you can submit the Release Request before signing a contract.
   If you do this, you have up to 24 months (an initial 12 months and an automatic 12-month extension if you need it) to sign a contract on your first home.
   If more than one person is buying the home, each person can use their own FHSS as long as they meet the criteria.
   Even if one person is not eligible, other eligible buyers can still apply for the FHSS.

First Home Guarantee (FHBG) is an Australian Government program designed to reduce the upfront cost of buying a first home.

Eligible buyers can purchase their first home with a deposit of as little as 5%, and without needing to pay Lenders Mortgage Insurance each year.

The Commonwealth Government’s Guarantee (or FHBG) is available to eligible first-home buyers who can only afford a small deposit.

The government guarantees the remaining balance of the deposit, so buyers who can’t pay the usual 20% deposit, can access a mortgage without having to pay a large deposit or expensive Lenders Mortgage Insurance.

Generally, when applying for the First Home Guarantee (also known as First Home Loan Deposit Scheme or FHLDS) in the ACT in 2023, you must:

• Be an Australian citizen, 18 years of age or older who has not owned property before
• Earn no more than $125,000 p.a. as an individual or up to $200,000 p.a. as a couple.
• Be planning to live in the dwelling.

Only homes to live in fall under the scheme, such as:

• A house, townhouse, or apartment that’s already been built
• Land with a home building contract
• Off-the-plan dwelling
• A house and land package

In the ACT, to be eligible, the maximum value of the property is $750,000.

For more information about eligibility, check out the FHBG site.

Join Spaceship Super - A super way to save for your first home using the FHSS.