First Home Super Saver cap to be increased to help Aussies save a deposit

By Niko Iliakis · · 2 min read
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The maximum amount of superannuation that Australians can dip into to purchase their first home will soon be bumped up by $20,000, following the passage of new legislation last week.

Starting 1 July 2022, first home buyers will be able to access up to $50,000 worth of voluntary contributions via the First Home Super Saver Scheme. That amount was previously capped at $30,000.

Since it was introduced in 2017, the scheme has allowed first home buyers to use their superannuation accounts to save for a home deposit, either by sacrificing part of their salary each year or by making personal contributions.

Eligible contributions are taxed at 15 per cent, rather than the higher rate first home buyers would be required to pay through income tax. Importantly, only voluntary super contributions can be withdrawn. 

Any Australian above the age of 18 can opt in to the scheme, so long as the following criteria are met:

  • You have never owned a property in Australia before
  • You have not previously received a FHSS payment
  • You intend to live in the property you are purchasing as soon as possible
  • You must purchase a property within 12 months of applying for your funds to be released (the ATO can extend this by another 12 months if necessary)
  • You must live in the property for at least six of the first 12 months following settlement

In addition to the changes to the FHSS scheme, the government will also reduce the eligibility age for those hoping to downsize and put the proceeds of the property sale towards their superannuation, from 65 to 60 years old.

The government hopes this will encourage older Australians to bring forward their plans to sell the family home and increase the stock of larger homes available for younger families.

For more on the support available to first home buyers, browse our guide to ​​first home owner grant and deposit schemes. And if you’re in the market for a home loan, visit our home loan comparison page, or browse the selection below.

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