Scheme to give savings super lift

ASPIRING first- home savers struggling with soaring property prices have been given a lifeline to use their superannuation fund to save a house deposit.

The First Home Super Saver Scheme passed through Parliament this month now allows entry- level buyers to stash cash using their super accounts while reaping significant tax benefits.

Announced in the Federal Budget in May, the Government said the scheme would help make owning a home become a reality for those squeezed out of the market.

Through the scheme, individuals can now contribute up to $ 15,000 each financial year above their compulsory contributions to a maximum of $ 30,000. Couples can contribute together up to $ 60,000.

These are the maximum extra contributions that can be made under the scheme.

And from July 1 next year super members can make withdrawals of these extra savings tucked away in their super accounts to purchase property.

Treasurer Scott Morrison estimated most first- home buyers would be able to accelerate their savings by at least 30 per cent using the scheme.

Homeloanexperts. com. au’s managing director Otto Dargan said the scheme was a win for savvy first- time buyers but many people remained confused about how it works.

“It’s good to see that the Government recognises the challenge facing first- home buyers and is prepared to take action to help them,’’ he said.

“We’ve seen some firsthome buyers who think they can withdraw their current superannuation or who made large contributions before the 1st of July.”

Dixon Advisory’s head of advice Nerida Cole said for an average wage earner on about $ 80,000, if they can maximise the $ 30,000 limit for singles over a two- year period, they will end up with about $ 5000 more in their pocket to contribute a deposit under the tax concessions.

Association of Superannuation Fund of Australia’s chief executive officer Dr Martin Fahy said it remained unclear how many would take up the scheme.