The legislation is being put to the Senate for the proposed First Home Super Savers Scheme (FHSSS).
Under the proposed scheme, people could make annual contributions of up to $15,000 to their super fund, to a total of $30,000.
Contributions would be taxed at 15 percent and withdrawals would be taxed at the individual’s marginal rate, minus a 30 percent offset.
The federal government has suggested the proposed scheme could boost an individual’s deposit by 30 percent, compared to saving through a regular bank account.
Under the planned program, first home buyers can make pre-tax contributions to their super fund, allowing them to reduce their taxable income. Existing annual contribution limits still apply of $25,000 for concessional contributions and $100,000 for non-concessional contributions.
Funds can be salary sacrificed, or if a first home buyer’s employer does not offer salary sacrificing, he or she can make a personal contribution to their super instead and claim a tax deduction.
Stamp duty concessions
This year, on a state level, Victoria and New South Wales introduced more generous provisions for stamp duty paid by first home buyers.
In Victoria, first home buyers are exempt from paying stamp duty if the property’s value is $600,000 or less and the contract date is on or after 1 July 2017.
For properties valued between $600,000 and $750,000, first home buyers pay a concessionary amount on a scale that reduces as the property’s value rises.
There are also grants available for people buying or building a new home valued up to $750,000. Property purchasers receive $20,000 if the home is in regional Victoria, or $10,000 in other areas.
- New South Wales
In NSW, stamp duty has been abolished for first home buyers on homes valued at up to $650,000, with a concession available for homes valued between $650,001 and $800,000.
From 1 July 2017, the NSW government has also abolished insurance duty on lenders’ mortgage insurance, and increased duties and land taxes for foreign buyers. But investors are no longer able to defer paying stamp duty on off-the-plan purchases.
There are also grants for first home buyers building a new home, who receive a $10,000 grant on properties worth up to $750,000. People buying an established new first home worth up to $600,000 are entitled to a $10,000 grant.
In Queensland, first home buyers can take advantage of a grant of up to $20,000 to go towards a first home valued at less than $750,000.
- South Australia
In South Australia, first home buyers can enjoy a grant of up to $15,000 and stamp duty concessions.
- Western Australia
In Western Australia, stamp duty concessions are available for properties valued up to $530,000, or $400,000 for vacant land.
Changes to first home buyer initiative schemes happen frequently, so it’s a good idea to check your state’s government website and also contact me if you’re buying a property to make sure you’re up to date with these rules.