All First Home Super Saver Scheme posts

Re: Release of funds and contract dates

ChrisR — Thu, 27 Feb 2020 02:28:12 GMT

We are still looking into this one for you and will get back to you as soon as we can.

Thanks,

ChrisR

Re: First Home Super Saver - Calculation and Withdrawal Amount

Shikhar — Wed, 26 Feb 2020 23:58:04 GMT

Thank you Chris for a perfect and well explained reply.

I have cleared all my doubts around how the scheme works.

I just have one hestiation in order to derive the actual amount I will be saving:

1) I will be paying 15% tax on my suber contributiuon ( which is understood)

2) and i will be blocking another 15% at the time of withdrawal (Because my contributions are concessional I can only withdraw 85%) .

I understand that I am not loosing money on the 15% blocked into super (2) and I will access that money on retirement. But from a first home saving prepsective I am loosing my 30% (1) plus (2) in order to get a 30% tax offset benefit at the time of withdrawal.

Am I missing something here or it doesn't make sense to go through all the hurdle in order to get barely neglegible benefit. ( I am just trying to understand the benefit I will get out of the scheme).

Your thoughts please ?

Thanks!

Shikhar

Re: First Home Super Saver - Calculation and Withdrawal Amount

ChrisR — Wed, 26 Feb 2020 23:30:21 GMT

Thanks for your questions. To make it easier, we will answer them one at a time.

1. How much will we be able to save?

The FHSS scheme allows you to save money for your first home inside your super fund. You are able to take advantage of a higher rate of earnings and for those who salary sacrifice or claim a deduction, a reduced rate of tax.

A good way of looking at how much you and your wife can save is to combine your after tax FHSS release amounts with the tax credits that you will be entitled to due to claiming tax deductions for your contributions.

The following example combines your 2019-20 and 2020-21 contributions together and assumes a 37% marginal tax rate for both of you. Refer to the individual income tax rates page on our website for more information.

Total tax withheld by super funds after receiving notice of intents: $9,000 ($60,000 x 15%)
Total tax payable on assessable FHSS released amounts (excluding associated earnings): $5,400 ($60,000 x 37% plus Medicare levy minus 30% offset)
Total tax credits due to personal contribution deductions: $23,400 ($60,000 x 37% plus Medicare levy)
Total amount saved: $69,000 ($60,000 minus $9000 (1) minus $5,400 (2) plus $23,400 (3))

The associated earnings amount is harder to demonstrate because it will depend on what months you and your wife make your voluntary contributions and when you both submit your FHSS determination requests. The longer your contributions remain in your funds, the more you will earn.

When you submit your FHSS determination request, we will calculate the associated earnings using a deemed rate of return – this is based on the 90-day Bank Bill rate plus three percentage points. You can view these rates by checking out the shortfall interest charge (SIC) rates page.

Whatever the associated earnings amount ends up being, based on a marginal tax rate of 37%, it will be reduced by 9% (37% plus Medicare levy minus 30% offset) as it forms part of your assessable FHSS release amount.

2. Will the voluntary contributions be concessional or non-concessional?

They will be classed as concessional contributions due to the fact that you are both claiming personal contribution tax deductions. You can find out more about concessional contributions on our website.

3. How much will we be able to withdraw from our super funds?

You will be able to withdraw 85% of the concessional contributions plus associated earnings. You can also withdraw 100% of non-concessional contributions but that doesn't apply to your scenario.

4. Can we use the FHSS scheme to purchase land?

No. If you purchase vacant land to build a home on, it is the contract to construct your home that must be entered into to meet the FHSS scheme requirements. You can also use the scheme to purchase a home. Have a look at the after your savings have been released section of the FHSS scheme page for more information.

5. Are we missing anything that can increase the benefit of using the FHSS scheme?

As mentioned previously, the longer you leave your contributions in your super fund, the more your associated earnings will be. Also, if you would like your voluntary contributions to be classed as concessional contributions, another way of achieving that is via salary sacrifice arrangements with your employers (if applicable).

We recommend that you have a really good read of the first home super saver scheme page before you make a voluntary contribution, sign a contract or submit a FHSS determination or release request.

Hope this helps.

Thanks,

ChrisR

Re: FHSS and Tax

cms — Wed, 26 Feb 2020 19:53:12 GMT

Hi ChrisR

Thanks for clarifying regarding tax on assessable amount.

Your explanation indicates the 20% FHSS rate is a penalty applied if not used to buy first home or nor recontributed.

Have amended 2019 tax return to include assessable amount.

Thanks again.

Re: FHSS Scheme contributions, tax and timeframes

ChrisR — Wed, 26 Feb 2020 03:16:43 GMT

Thanks for your post.

The 20% FHSS tax only applies in specific situations. It is an additional tax above and beyond the tax that is applied to the assessable FHSS released amount when you lodge your tax return.

Most people won't have to pay the extra 20% FHSS tax however everyone that receives an assessable FHSS released amount will need to declare it on their tax return.

Based on what you have advised in this thread and your other thread (FHSS and Tax), it doesn't sound like you will be liable for the 20% FHSS tax but you will still need to declare the assessable FHSS released amount in your 2019 tax return.

The tax that you will need to pay will be whatever your marginal tax rate is plus Medicare levy minus the 30% offset. It is likely that this tax has already been withheld. Refer to the payment summary that we issued to you.

For more information about how the first home super saver scheme works, refer to our website.

Hope this helps.

Thanks,

ChrisR

Re: FHSS and Tax

ChrisR — Wed, 26 Feb 2020 02:55:15 GMT

Thanks for your post.

After you have submitted a FHSS release request, a payment summary will be sent to you detailing the assessable FHSS release amount as well as any tax that was withheld.

Even though you received the FHSS released amount in July 2019, because the request was submitted in June 2019, the assessable FHSS release amount needs to be included in your 2019 tax return.

For more information about what you need to do after receiving your amount, check out the first home super saver scheme page on our website.

If you didn't include the assessable FHSS release amount in your original 2019 tax return lodgment, you will need to submit an amendment. The amendment requests page explains how you can do that.

It is great that you have notified us of your home purchase as that is part of your FHSS scheme notification requirements. Recontributing the assessable FHSS release amount back into your super fund is also within the rules, however it doesn't change your tax return requirements.

Regardless of what you choose to do with the released amount, you are still required to declare the assessable FHSS release amount in your 2019 tax return.

Hope this helps.

Thanks,

ChrisR

Re: FHSS Scheme contributions, tax and timeframes

cms — Tue, 25 Feb 2020 22:51:15 GMT

"Your options if you don’t sign a contract in the required time frame. This is 12 months from when your first FHSS amount was released to you or your extended time frame if you’ve been granted an extension. If you don’t sign a contract in this time you'll need to re-contribute the assessable FHSS amount back into your super fund or pay the FHSS tax."

signed a contract in the required time.
Paid back Assessable FHSS Amount into my Super fund within 8 months FHSS release.
Therefore NO FHSS TAX? No Need to report Assessable amount?

Re: FHSS and Tax

cms — Tue, 25 Feb 2020 22:38:49 GMT

Called ATO with same question. Was Transferred 3 times - Super to FHSS to Tax - no one was Trained on FHSS. The call lasted 2 hours.

Re: FHSS "as soon as practicable after purchase"

ChrisR — Tue, 25 Feb 2020 08:08:44 GMT

Thanks for your question.

If you purchase a property that is currently tenanted, unless your tenant is happy to vacate early, you won't be able to move in until at least December this year. In turn, it wouldn't be practicable to move in sooner than that.

For more information about your requirements after your savings have been released, check out our website.

If you were to move in to the property in January next year, it would be shortly after your tenant has vacated. This would meet the first requirement.

Assuming that you then live in it for at least the next six months, the second requirement would also be met.

It is important to note that the clock doesn't start ticking from the contract date or the settlement date. This requirement is measured from when the property is able to be occupied by the owner.

This ensures that purchasers aren't disadvantaged by situations like this one. It also ensures that if you are signing a contract to construct a home, you don't have to rush the construction so that you can move in by a certain date.

Hope this helps.

Thanks,

ChrisR

FHSS and Tax

cms — Tue, 25 Feb 2020 02:28:04 GMT

Requested FHSS withdrawal June 26, 2019 - 2019 Tax Year. Received July 2019 - 2020 Tax Year. Purchased first home and Notified ATO. Also Salary Sacrificed the entire Assessable Amount back into Super Account.

Recently discovered letter in My Gov Messages from ATO stating I must include Assessable Amount on 2019 Tax Return.

Should I amend my 2019 tax to include Assessable amounts of FHSS even though I provided notifications AND repaid the amount?

Thanks for your guidance.

Re: FHSS Scheme contributions, tax and timeframes

ChrisR — Mon, 24 Feb 2020 04:28:29 GMT

Thanks for your question.

The only contributions that count are voluntary contributions. They can be voluntary concessional contributions (salary sacrifice amounts or personal contributions that have been or will be claimed as a tax deduction) or voluntary non-concessional contributions (after tax contributions).

Compulsory contributions such as SG contributions can't be withdrawn via the FHSS scheme. If you haven't made any voluntary contributions since 1 July 2017, you won't be able to submit a FHSS determination request.

If you start making voluntary contributions now, you can withdraw those contributions via the FHSS scheme. Any SG contributions made between now and then can't be included in your FHSS determination request.

Check out our website for more information about how you can save in super and the contributions you can make.

Hope this helps.

Thanks,

ChrisR

First Home Super Saver - Calculation and Withdrawal Amount

Shikhar — Mon, 24 Feb 2020 03:59:45 GMT

Hi!

I would like to know how much am I saving if I choose to use FHSS scheme.

Currently I am earning $1,25,000 before Tax ( including 9.5% Super) , my wife earns $1,06,000 before Tax ( including 9.5% Super).

2019 -2020 : I make a voluntary after tax contribution into my Super of $15000 between Feb and June 2020 ( I also claim a tax deduction on it via Notice of Intent) . I checked that I have not capped the total yearly limit
2019 -2020: My wife makes a voluntary after tax contribution into her Super of $15000 between Feb and June 2020 ( she also claim a tax deduction on it via Notice of Intent) . She checked that she has not capped the total yearly limit
2020-2021 : I make a voluntary after tax contribution into my Super of $15000 between July and Dec 2020 ( I also claim a tax deduction on it via Notice of Intent) . I checked that I have not capped the total yearly limit
2020 -2021: My wife makes a voluntary after tax contribution into her Super of $15000 between July and Dec 2020 ( she also claim a tax deduction on it via Notice of Intent) . She checked that she has not capped the total yearly limit
In total, between me and my wife, we have contributed $60000 into Super as voluntary contributions.

Plan to purchase first home in 2021.

Questions :

Based on this scenario can you please me understand how much I might be saving, in general, through the FHSS? Would appreciate it if you could give me a break down of the calculation including tax, associated earnings, etc..
Are my super contributions Concessional or Non-Concessional as I am claiming a tax deduction on them?
How much will I be able to withdraw from my Super ? As per my understanding I can withdraw 85% of my concessional contributions. Please correct me if i am wrong. Does blocking 15% of your super amount makes sense by the benefit we get from the FHSS scheme?
I can only buy a already build house/ Contruct a house with the FHSS amount? I can't buy a land through it?
Anything that I am missing that can increase the benefit of FHSS?

Thanks!

Re: FHSS Non Concessional Contributions Tax Deductable?

ChrisR — Mon, 24 Feb 2020 03:48:04 GMT

Thanks for your post.

Your analysis and calculations are correct. By claiming the personal super contribution deduction, you will be $2,250 (15% of $15,000) better off.

When you look at the calculations, you will discover that this is because of the 30% offset that is applied to your assessable FHSS released amount.

Another way of looking at it is this: $15,000 minus $2,250 (15% contribution withholding tax) plus $4,500 (30% offset) equals $17,250 ($15,000 plus 15%). The other tax rates and numbers cancel each other out.

Hope this helps.

Thanks,

ChrisR

FHSS "as soon as practicable after purchase"

vefzdybg — Sun, 23 Feb 2020 13:13:05 GMT

I understand that for FHSS to be withdrawn appropriately I need to:

occupying or intending to occupy the property as soon as practicable after purchase
occupying or intending to occupy the property for at least six of the first 12 months from when it is practicable to occupy it.

but I'm wondering how this works if I buy a property that has an existing lease that ends later than 6 months. So for example if it's March and I buy a property that has a tenant on a pre-existing lease until December. If I plan to move in as soon as they vacate (i.e. January next year) does this still fall within the requirements?

Release of funds and contract dates

mikalex39 — Sat, 22 Feb 2020 06:19:26 GMT

Hi guys,

I recently signed a contract to place an offer for a house on the 15/2/2020 with a settlement contract to be signed in April. I met with a mortgage broker today and subsquently in consolidating all available assets, applied for release of my FHSS funds. This included both the determination and release request. I noted on applying however that the determination should have been requested before a contract is signed. My first question is which contract applies to the above, the offer or the settlement contract? If it's the former, does that mean I will be taxed because I asked for a determination 1 week after I signed an offer?

Thanks in advance

Re: Centrelink debt vs FHSSS

macfanboy — Fri, 21 Feb 2020 22:59:56 GMT

Any amounts you withdraw from your super fund as part of the FHSS Scheme will be used to pay your outstanding Commonwealth debts.

“Commonwealth debts” can include:

Income tax debt
Certain business (or integrated client) account debts, including activity statement debt
Centrelink debts, and
Child Support Agency debts.

Doesn't matter if you have a "Payment Plan', they will take the money at the first opportunity.

Centrelink debt vs FHSSS

Justice8511 — Fri, 21 Feb 2020 13:55:18 GMT

Once a determination is made, is that a final amount, or there can be more deductions like centrelink debt offset? If there is a payment plan in place for the centrelink debt, will the debt still be deducted from the detemination amount?

Re: FHSS release requested

NateH — Fri, 21 Feb 2020 01:51:58 GMT

Hi ,

When you receive your amount we will withhold tax that will be calculated at either:

your expected marginal tax rate, including Medicare levy, less a 30% offset
17% if the Commissioner is unable to estimate your expected marginal rate.

The only other taxes that could apply to FHSS amounts is the FHSS tax. This only applies if you do not sign a contract to purchase or construct a home within 12 months from the date you requested a release though (which doesn't apply to you).

Have a look at our web content about the FHSS specifically the section After your savings have been released

Thanks, NateH

Re: FHSS

SebReiter — Thu, 20 Feb 2020 06:09:00 GMT

Hi Rebecca

The best record is statements sent to you by your previous super fund, showing the timing and amount of these contributions.

Any voluntary non-concessional contributions you've made from 1 July 2017 onwards will be eligible to be released if you're otherwise eligible for FHSSS.

You can request an FHSS determination from the ATO which will show the amount that can be released under the scheme. Where eligible contributions have been correctly reported to the ATO by your super fund these amounts will be pre-filled for you on the determination. Where they haven't been correctly reported you'll need to add these details yourself.

Here's a link to the FHSS information page on ato.gov.au.

I'm an ATO employee voluntarily providing my time here

Re: Buying a land - When to apply for a FHSS determination

ChrisR — Wed, 19 Feb 2020 23:27:05 GMT

Thanks for your post.

Your understanding is correct. To be eligible to use the first home super saver (FHSS) scheme, you must have never owned property in Australia. This includes vacant land.

You can check out the first home super saver scheme page on our website for more information.

This rule means that you will need to make sure that you have made all of your voluntary contributions and submitted your FHSS determination request before making your land purchase.

As to when you will be considered a land owner, generally this is when you sign the land purchase contract, not when you pay the holding deposit. In turn, you will need to submit your FHSS determination request before you put pen to paper.

It is also important to note that if you purchase vacant land to build a home on, it is the contract to construct your home that must be entered into to meet the FHSS scheme requirements.

Hope this helps.

Thanks,

ChrisR

FHSS

RHiggins — Wed, 19 Feb 2020 06:00:08 GMT

Hi,

I made several volutary contributions (non-concessional) into my super account over the last few years. I have since rolled my super over to a new provider who don't have that history. Is there anyway to find out via the ATO if any of those contributions are eligibile under the FHSSS? I just want to know if I have any money that is accessible under the scheme so I can plan my savings over the next year.

I'm otherwise eligible for the FHSSS.

Best

Rebecca

Re: FHSS Scheme contributions, tax and timeframes

Johanny — Wed, 19 Feb 2020 03:56:03 GMT

Hi NicM,

Could you please clarify that Employer compulsory contributions, such as Superannuation Guarantee (SG) contributions don’t count towards the FHSS Scheme? Only my voluntary contribution will count?

Just asking as I do have funds in my super and I am looking to buy a property soon, however, I haven't made any voluntary contributions. So, will I be eligible or not?

Alternatively, could I start making voluntary contributions now and withdraw from the FHSS alongside my employer contributions in the near future?

Thanks

Re: FHSS Non Concessional Contributions Tax Deductable?

Marco85 — Tue, 18 Feb 2020 11:15:57 GMT

Hi Cris,

I will try to rewrite your detailed answer. Can you please correct me if my analysis is wrong?

If I do a $15,000 non-concessional contribution to my superannuation account with the intention to withdraw it as FHSS, and I do specify I want to claim a tax deduction:
1) 15% will be taxed by the superannuation
2) The $15,000 contribution will be taxed according to my marginal rate (eg. 32.5% at $90,000 income) + 2% medicare - 30% FHSS offset (ie. 4.5%)
3) I can claim $15,000 as a tax deduction at the end of the financial year

If I've got it right, assuming $0 earnings, from point 1) and 2) I will be left with:
1) $15,000 x 15% = $12,750 (tax witheld $2,250)
2) $15,000 * (32.5% + 2% - 30%) = $15,000 * 4.5% = $675 (tax witheld)
The amount that will be released by ATO should be: $15,000 - $2,250 - $675 = $12,075.
So, considering that initially the $15,000 contribution was "after-tax", I have "lost" $2,925 in taxes.

Which does not sounds very convenient if you needed the whole $15,000 for a home deposit.

However, since I can claim the original $15,000 as a tax deduction, assuming an overall income of $90,000:
3) at tax time I will get a $5,175 back because the overall income will be $75,000.

Thus the final gain will be: $5,175 (tax return) - $2,925 (previously witheld taxes) = $2,250
(by coincidence this amount matches with the 15% originally witheld by syperannuation)

If that is correct, in a case scenario similar to the one given as an example in this page, it sounds like it is pretty convenient to claim a tax deduction for the non-concessional contribution taken out for FHSS.

Re: FHSS Withdrawl

Badru — Tue, 18 Feb 2020 10:32:41 GMT

Hi Chris,

This helps heaps! Thanks so much!

Re: FHSS & Non-concessional superannuation contributions

ChrisR — Tue, 18 Feb 2020 03:37:25 GMT

Thanks for your post.

We have provided some information to you about your situation in another thread. In case you missed it, you can check out it out here: FHSS Taxed Non-Concessional Amount

We will only withhold tax from the assessable FHSS released amount. This amount is your concessional contributions plus associated earnings and is based on the information that you have provided in your FHSS determination request.

If your circumstances are different to what you outlined in the other thread, let us know.

Hope this helps.

Thanks,

ChrisR

Re: FHSS & Non-concessional superannuation contributions

Marco85 — Tue, 18 Feb 2020 02:34:35 GMT

This has not been applied to me!
I triggered an ATO internal investigation, and the outcome is: ATO will tax anything you get out of superannuation. In case of FHSS and non-concessional contributions, once you withdraw, even if it's 100% from concessional contribution, you will be taxed again based on your income for the current financial year.
I've just had a phone call from ATO, they are closing my case with such explaination, no matter I was telling them this is WRONG.
Please someone help me!!!
Last August I've put $15,000 as after-tax money from my bank account, and in December I've requested determination. The result from the online determination was that the max releaseable amount was around $13,000. I've called ATO for explaination, and I've been told that I will get back the missing money via Tax return at the end of the financial year. However, after then applying for release, I have then received less than $11,000 in my bank account.

Re: FHSS release of funds AFTER signing the contract

Biggiesmalls — Mon, 17 Feb 2020 22:52:48 GMT

Did you apply for a determination before you signed the contract? If you did you may still be eligible if you request a release within 14 days of signing the contract.

This is from the website....

You must apply for and receive a FHSS determination from us before signing a contract for your first home or applying for release of your FHSS amounts.
If you've already received a determination and signed your contract to purchase or construct your home, you must make a valid release request within 14 days of entering into that contract. You can also sign your contract after you make a valid release request.

https://www.ato.gov.au/Individuals/Super/Withdrawing-and-using-your-super/First-Home-Super-Saver-Scheme/#Eligibilityforthescheme1

FHSS release requested

ilikwbigbucks — Mon, 17 Feb 2020 22:33:46 GMT

hi community

I requested a release of FHSSS a couple of weeks ago. I received a letter from my super fund that they have deducted the amount and sent it to the ATO last week. I signed a contract and paid the deposit on my house.

What can i do with the money once it hits my banck account? Can i use it to pay my mortgage? Or will i get taxed heaps on that money? I know i red somewhere i could transfer it back as well....

TIA!!

Buying a land - When to apply for a FHSS determination

P-32 — Sun, 16 Feb 2020 21:57:48 GMT

Hi,

I am intending to buy a land before constructing a home on it to live in. You have stated in your website that “ you must not have purchased the vacant land before applying for a FHSS determination.”. I have selected the land I want to purchase and the seller has asked me to pay a holding deposit. At what point do I have to apply for a FHSS determination? Is it before paying the holding deposit, before signing the contract to buy the land or before transfer of title?

Re: claiming a tax deduction on contributions for FHSS

ChrisR — Fri, 14 Feb 2020 07:04:39 GMT

Thanks for your post.

As long as you meet the criteria (which includes the notice of intent), you can claim the personal super contribution deduction in your 2020 tax return. The fact that your super fund will no longer hold the contribution (due to a FHSS release) doesn't matter.

For more information about claiming deductions for personal super contributions, have a look at our website.

When you submit your FHSS determination request, you will be asked to provide the total deduction amounts for each applicable financial year. You can include deductions that you have already claimed as well as those you intend to.

You can find out more about the FHSS scheme and applying to release your savings on our website.

Except for the fact that you haven't factored in the Medicare levy into your calculation, your FHSS release calculation is just about right. Your after tax FHSS release amount will be $760 ($1000 minus $150 minus $70 minus Medicare levy).

When you claim the $1000 personal super contribution deduction, it will reduce your tax by $390. This is based on $1000 x 39% (37% plus Medicare levy). Don't forget that you are claiming a $1000 tax deduction, not a $1587 tax deduction.

By taking advantage of the FHSS scheme and the personal super contribution deduction, you have gained an extra $150 plus associated earnings. This is because $760 (after tax FHSS scheme amount) plus $390 (tax reduction) equals $1,150 which is $150 more than the original $1,000 personal contribution.

Hope this helps.

Thanks,

ChrisR

FHSS release of funds AFTER signing the contract

SP22 — Thu, 13 Feb 2020 12:01:45 GMT

Hi,

I signed a contract to purchase my first home. I was not expecting it to happen so fast but my offer was accepted on the same day. Now I am looking to release funds from my voluntary contributions into my Super via the FHSS scheme. I had not requested FHSS determinations prior to signing the contract. Does this mean I am not able to access this money at all now?

Thanks for any advice/help!

Re: FHSS Release request not received by Super?

ChrisR — Thu, 13 Feb 2020 01:47:22 GMT

Thanks for your question.

After you have submitted a FHSS release request, we will issue a release authority to your super fund requesting they send your FHSS release amounts to us. In most cases, it will take between 15 and 25 business days for your fund to release your money and for us to pay it to you.

For more information about requesting the release of your savings, check out the applying to release your savings section of the first home superannuation savings scheme on our website.

Considering that you submitted your FHSS release request on 8 February and your finance deadline is 10 business days later, it may be a good idea to look at getting an extension on the finance clause of your property purchase contract. If you explain why the the extra time is needed, hopefully the seller will be happy to provide it to you.

In the meantime, you could try contacting your super fund again to find out whether they have received the release authority from us. if they have, perhaps you could get them to process it quickly for you.

Also, if you are arranging finance with a lender and they are waiting for the balance of the FHSS released amount to be in your account before approving your loan, we recommend that you let them know what is happening.

Hope this helps.

Thanks,

ChrisR

Re: FHSS Withdrawl

ChrisR — Wed, 12 Feb 2020 03:50:35 GMT

Thanks for your reply.

There are two types of contributions that you can make towards the FHSS scheme:

voluntary concessional contributions – including salary sacrifice amounts or contributions for which a tax deduction has been claimed, these are usually taxed at 15% in your fund
voluntary non-concessional contributions that you have made – these are made after tax or if a tax deduction has not been claimed.

For more information about the FHSS scheme and how you can save in super, check out our website.

The example in your first post outlined a total of $30,000 of voluntary contributions over two financial years:

$15,000 in the 2019 income year via a salary sacrifice arrangement
$15,000 in the 2020 income year via a salary sacrifice arrangement.

When you make a contribution to your super fund via a salary sacrifice arrangement, the amounts are deducted from your gross (before tax) salary. You don't pay personal income tax on these amounts.

When your super fund receives the salary sacrificed contributions, they are required to withhold 15% which is a concessional tax rate. In turn, they are considered to be concessional contributions.

When you submit your FHSS release request, only 85% of your voluntary concessional contributions will be included in your FHSS maximum release amount. You can't withdraw the other 15% because that is the tax that your super fund has already paid.

The reason why you can withdraw 100% of your voluntary non-concessional contributions is because there is no tax withheld from these contributions by your super fund.

Hope this helps.

Thanks,

ChrisR

Re: FHSS Non Concessional Contributions Tax Deductable?

Honey99 — Wed, 12 Feb 2020 03:28:10 GMT

Hi Chris
Thank you very much for your detailed explanation. Now it Is very clear.

👍👍👍👍👍👍

claiming a tax deduction on contributions for FHSS

BB2 — Wed, 12 Feb 2020 08:40:07 GMT

I have made a personal voluntary contribution to my super fund, with the intention of using it for a house purchase later. Instead of salary sacrificing, I made the contribution from my after tax income and sent my fund a notice of intent to claim a tax deduction. The fund deducted the concessional tax rate (15%) from my contribution, and I expected to be able to get the original income tax payment back, when I submit my tax declaration at the end of the financial year. (This was in 2019/20). Now I would like to get the money to use it for a house purchase, but the financial year isn't over. Will I still be able to claim a tax deduction when I submit my tax declaration for 2019/20, even though the contribution is no longer in my super account?
I suspect what's going to happen is roughly this, assuming I made a $1000 contribution: (I'm in the 90001-180000 bracket)
I earned $1587, my employer took out 37% tax and transferred $587 to the ATO and $1000 to me.
I transferred $1000 to my super fund and notified them that I'll claim it as a deduction.
My super fund transferred the concessional tax ($150) to the ATO and left $850 in my super account.
I now ask the ATO to release my contribution. It will now be taxed again at 7% (37% minus the 30% offset) when it's released. So I get $1000-$150-$70=$780 to use for a house.
I will then claim the $1000 contribution in my next tax return, and get the original $587 back.
Is that about right?
I know there's also the medicare levy and the earnings I made on the contirbution, and that'll probably make it all a bit more complicated, but those finer details don't concern me so much. I mostly want to know a) if that is roughly how it works, and b) that I can still claim a deduction on my original after-tax contribution at the end of the year, even though I've already withdrawn the contribution in question.

Re: FHSS earnings calculation

KylieS — Tue, 11 Feb 2020 22:53:22 GMT

Hi Jack_sp,

To add to the great information from .

The deemed rate is not linked in any way to the actual earnings or losses of your super fund. Contributions you make to your super fund will receive earnings/losses based on your fund performance in the usual way, however, when we calculate your maximum releasable amount under the FHSS scheme, we will calculate associated earnings using the deemed rate of return.

KylieS

Re: FHSS Determination

ChrisR — Tue, 11 Feb 2020 07:44:11 GMT

You can submit multiple FHSS determination requests but you can only submit one FHSS release request. After you have submitted your release request, you won't be able to submit any more determination requests.

It is also important to note that you won't be able to submit a determination request after you have signed a home purchase or construction contract. Also, if you intend to build and want to purchase the land separately, you won't be able to submit a determination request after you have purchased the land.

So if you want to submit a determination request now, make some more contributions then submit another one in say six months, you can as long as you meet the requirements.

You can check out the first home super saver scheme page on our website for more information about how the scheme works.

Hope this helps.

Thanks,

ChrisR

Re: FHSS earnings calculation

SebReiter — Tue, 11 Feb 2020 05:19:54 GMT

Hi Jack_sp

Nope, it's the shortfall interest charge (SIC) rate that's used to calculate the associated earnings amount.

Calculating actual earnings on contributions made is problematic for several reasons, which is why notional earning rates are used for the various superannuation policies we administer where earnings need to be calculated. These difficulties are discussed in the explanatory memorandum for the Bill that contained the First Home Super Saver Scheme - see paragraph 1.137 onwards.

The explanatory memorandum doesn't explain why the SIC rate was chosen as opposed to a different rate.

I'm an ATO employee voluntarily providing my time here

Re: FHSS Tax

ChrisR — Tue, 11 Feb 2020 02:53:21 GMT

Thanks for your question.

We have recently posted a response to another question that you have asked. You can check out the response here: FHSS Non Concessional Contributions Tax Deductable?

If you want to make some personal super contributions and claim a tax deduction for them, there is no upper income limit. In fact, the higher your taxable income is, the bigger the initial tax saving will be.

The answer to your other post outlines how much tax would be saved if your marginal tax rate was 32.5% ($2,925 based on a $15,000 personal super contribution deduction). If your marginal tax rate was 45%, including the Medicare levy the tax saving would be $4,800 ($7,050 minus $2,250).

Of course, being in a higher tax bracket in the year that you submit your FHSS release request would mean that your assessable FHSS release amount would be subject to a higher tax rate. Assuming a tax rate of 45%, the $15,000 would be taxed at 17% (45% plus Medicare levy minus 30%) or $2,550.

While there isn't an upper income limit, there is a rule that you could describe as a lower income limit. The deduction you claim can only reduce your taxable income to nil. It cannot add to or create a loss.

For more information about that, refer to the D12 Personal superannuation contributions 2019 page on our website.

Hope this helps.

Thanks,

ChrisR

Re: FHSS Non Concessional Contributions Tax Deductable?

ChrisR — Tue, 11 Feb 2020 01:59:22 GMT

Thanks for your question.

When you claim a tax deduction for a personal super contribution, your taxable income is reduced by the deducted amount. If your income was $90,000 but you claimed a tax deduction of $15,000, your taxable income would be $75,000.

This means that rather than paying personal income tax on $90,000, you would be paying personal income tax on $75,000. Based on a tax rate of 32.5% plus Medicare levy, the tax would be reduced by $5,175.

You can check out the resident tax rates by referring to the individual income tax rates page on our website.

Before a personal super contribution deduction can be claimed, your super fund must be advised by providing them with a notice of intent. Your super fund will then withhold 15% tax from the personal contribution.

You can find out more about claiming deductions for personal super contributions on our website.

15% of $15,000 is $2,250. By claiming a personal super contribution deduction, instead of personally paying $5,175, the super fund will withhold $2,250. This represents a tax saving of $2,925.

If the $12,750 ($15,000 x 85%) voluntary concessional contribution is released as a result of a FHSS release request, $15,000 will need to be declared in your tax return as an assessable FHSS release amount (plus associated earnings).

For more information about applying to release your savings, have a look at the FHSS scheme page on our website.

The assessable FHSS release amount will be taxed at your marginal tax rate plus Medicare levy minus a 30% offset. Assuming a marginal tax rate of 32.5% and ignoring the associated earnings, the $15,000 will be taxed at 4.5% or $675. This reduces the overall tax saving to $2,250 ($2,925 minus $675).

Hope this helps.

Thanks,

ChrisR

FHSS Release request not received by Super?

nirajbhatt — Tue, 11 Feb 2020 08:19:39 GMT

Hi Everyone,

Just wanted to understand the process of FHSS release. I made a release request on 8 Feb 2020. I contacted today my Super (SunSuper) and they informed me that they haven't received any request. I contacted ATO and they said they have submitted the request. There is no common number that gets generated in ATO that I can provide to Super to check? I am just stuck between ATO and Super at the moment.

It's super urgent for me as I have entered into a property purchase contract on 7 Feb 2020 and it will be canceled on 21st Feb 2020 if my finances are not sorted out.

Any help or pointer would be highly appreciated.

Just tagging ATO users to hopefully get some reply.

Thanks,

Niraj

FHSS earnings calculation

Jack_sp — Mon, 10 Feb 2020 13:42:24 GMT

Hello,

I am a little confused about what is the 'deemed rate of return' used to calculate the earnings on eligible contributions. It talks about the 90-day bank bill rate but I was under the impression it would be associated with higher rates of return based on the super funds performance?

Re: FHSS Withdrawl

Badru — Sun, 09 Feb 2020 10:15:17 GMT

Hi Mark,

Thank you for your response.

Simply explained, what is the difference between concessional and non-concessional contribution? While I have read the definition of it in several places, I am still quite confused about them.

Thanks.

FHSS Determination

Charlec — Fri, 07 Feb 2020 10:39:00 GMT

Hello,

I have been making salary sacrifices (before tax) into my super for the FHSS scheme.

I have been doing this over the past year, so somewhere up to 15, 000.

I am wondering if I submit a determination now, can I continue to make salary sacrifices into my super, and then get an updated determination which includes the new contributions, (of which the total would no more than 30,000 over the two years)? Or once I make the determination, is the amount of money that I've contributed fixed?

Regards,

Re: FHSS Taxed Non-Concessional Amount

ChrisR — Fri, 07 Feb 2020 07:45:15 GMT

Thanks for your reply.

As mentioned previously, if you have made a mistake with your FHSS determination request, you can only correct it if you are able to submit a new determination request. This option isn't available to you because you have already submitted a FHSS release request.

Based on the information that you have provided, the 15% tax that we think your super fund has withheld from your $15,000 voluntary contribution hasn't actually been withheld. In turn, $2,250 isn't lost and is still with your fund.

You won't be able to claim that amount unless you meet a different condition of release (refer to our website) but it isn't lost.

You will be able to declare the 17% tax that we have withheld from your FHSS release amount of $12,965 as a credit on your 2020 income tax return. That rate is based on the highest marginal tax rate plus Medicare levy less a 30% offset.

Depending on how much your 2019-20 taxable income is, the 17% tax rate may have been too high. In turn, you may be entitled to some or all of the $2,204 back as a refund.

Hope this helps.

Thanks, ChrisR

Re: Once money is released

ChrisR — Fri, 07 Feb 2020 07:00:48 GMT

Thanks for your question.

The FHSS scheme rules don't stipulate how the released amount should be spent, only that you are required to notify us within 28 days of signing a contract to purchase or construct a home.

For more information about your notification requirements and what you need to do after your savings have been released, have a look at our website.

Where there can be an issue is when the FHSS release amount is more than the contract amount. Of course, this isn't very likely and doesn't apply to your scenario.

If you have worked out that you will have around $11,000 more than what you need to complete your property purchase, it is up to you what you do with it. While it could be spent on improvements or other costs related to the house, it doesn't have to be.

Whatever you decide to do with the money, there is no requirement to put it back into your super fund.

Hope this helps.

Thanks,

ChrisR

Re: Incomplete tax return & FHSS

ChrisR — Fri, 07 Feb 2020 05:59:22 GMT

Thanks for your question.

To withdraw your voluntary super contributions under the FHSS scheme, you need to request a FHSS determination from us. When you submit your determination request, we work out a number of amounts including the estimated maximum withholding tax.

If your tax return lodgments aren't up to date, we won't be able to provide you with an accurate estimated maximum withholding tax amount. In saying that, your actual withholding tax will be calculated when you submit your FHSS release request.

For more information about the FHSS scheme and applying to release your savings, check out our website.

Of course, we recommend that you get your tax returns up to date as soon as possible. Have a look at the lodging your tax return page for more information about how you can do that.

It is also worth mentioning that a failure to lodge on time penalty may be applied if you're required to lodge a return with us by a particular day, but don't. Before we send the balance of the FHSS released amount to you, we will:

withhold the appropriate amount of tax, and
offset the remaining amount against any outstanding Commonwealth debts.

Hope this helps.

Thanks,

ChrisR

Re: Withdrawing same year contributions were made

ChrisR — Fri, 07 Feb 2020 05:32:42 GMT

Thanks for your question.

The short answer is yes. You can claim a personal super contribution deduction for a contribution that was made and withdrawn in the same financial year due to a first home super saver (FHSS) release request. You just need to ensure that you meet the FHSS scheme rules and the personal super contribution deduction rules.

This is actually a question that has come up a few times in our Community. The long answer to your question can be found in the following thread. We strongly recommend that you check it out.

Can I claim a tax deduction for a voluntary contribution after it has been withdrawn?

Hope this helps.

Thanks, ChrisR

Re: transfer to SMSF

ChrisR — Thu, 06 Feb 2020 06:56:43 GMT

Thanks for your question.

It is assumed that the members are hoping to transfer ownership of the asset to their SMSF in accordance with the business real property (refer to our website) in-house asset exemption. You have mentioned that the asset is currently a residential property.

The fact that it has approval to be a boarding house in the future doesn't make it a business real property now. That would need to be considered when determining whether this transaction meets the rules.

If the asset can be transferred, capital gains tax may be payable by the husband and wife unless the asset is considered exempt, e.g. main residence exemption. This is because a transfer of ownership would be taking place.

Whether any stamp duties would be payable is a question that would need to be directed to the relevant land titles office in the state or territory that the property is located in.

Most SMSFs don't need to register for GST because SMSFs mainly make input-taxed sales, and these don't count towards GST turnover. In saying that, SMSFs with an annual GST turnover of more than $75,000 must register for GST.

If the SMSF intends to construct the boarding house, the fund won't be able to borrow money under a limited recourse borrowing arrangement to build it. You can check out the limited recourse borrowing arrangements page for more information.

You may want to consider seeking professional advice about this one. You can also complete a request for self-managed superannuation fund specific advice form and send it to us if you would like us to take a closer look at your scenario.

Hope this helps.

Thanks, ChrisR

Re: FHSS Tax

Honey99 — Thu, 06 Feb 2020 02:42:10 GMT

Thank you for such a detailed explanation.

How much she can earn if those contributions are non concessional, but intend to use for tax deduction in order to get benefit on fhss scheme?
Thanks

Re: FHSS Non Concessional Contributions Tax Deductable?

Honey99 — Thu, 06 Feb 2020 02:18:36 GMT

If non concessional contribution becomes concessional contribution, will the amount add up in pay summary?
for example, A earns $90000 and she contributed $15000 after tax. She can withdraw 100% as it is non concessional. However, if she intends to claim tax deduction, it becomes concessional. Therefore she pays some tax about 9% (after 30% tax offset from marginal rate)? How much A save at all? Can u help me with this please. Thank you

Re: FHSS marginal rate determination/interest calculation/interest over or under super investments?

ChrisR — Wed, 05 Feb 2020 02:40:44 GMT

The short answer is yes. In saying that, while you can nominate a lower tax rate, we suggest that you choose a rate that is in accordance with your expected income. We don't recommend deliberately choosing a rate that will cause you to receive a tax bill.

Thanks, ChrisR

Re: First home super saver scheme (FHSSS) and owner-builders

ChrisR — Tue, 04 Feb 2020 23:51:45 GMT

Thanks for your question.

We have checked with our technical experts to find out whether there have been any changes to our view about owner builders and the FHSS scheme. The advice that they provided is in line with our previous answer.

The reason for this advice is because the FHSS scheme rules require that a contract is entered into to purchase or construct a home. When an owner builder constructs a home, there will typically be multiple contracts or none.

If you would like us to take a closer look at your scenario, we recommend that you follow our previous advice and write to us.

Thanks, ChrisR

Re: FHSS determination is missing some voluntary concessional contributions

QSuper — Tue, 04 Feb 2020 23:30:11 GMT

Before requesting a determination, you have the option to manually add any eligible contributions that may be missing.

Whilst you are able to make multiple determinations, please be aware, once you have requested a release you can't request another one, even if you have requested an amount less than your FHSS maximum release amount.

This is why it is important to make sure you confirm all your eligible contributions are listed prior to requesting your release of eligible FHSS funds.

You can find out more on the ATO website under; Applying to release your savings, and may find the QSuper First Home Super Saver Scheme page helpful.

Thanks,

Mark

Re: FHSS Taxed Non-Concessional Amount

Marco85 — Tue, 04 Feb 2020 05:30:35 GMT

Hi Chris,

I did not do any salary sacrifices, nor I have Commonwealth debts.

I have moved to Australia recently, and I am not very familiar with all the ATO procedures and definitions. This is why I did ask for help to ATO during the application process for the FHSS.
I think I might have misunderstood it, and selected that I will be claiming a tax deduction for my voluntary contributions (after tax).
What is then going to happen? Have I lost my money? How much will be returned in case?

Thank you

Re: FHSS Taxed Non-Concessional Amount

ChrisR — Tue, 04 Feb 2020 05:18:45 GMT

Thanks for getting back to us.

If you had no Commonwealth debts, it sounds like you told us that you had claimed or will be claiming a tax deduction for some or all of the voluntary contributions. Alternatively, you marked them as salary sacrifice contributions.

Either way, while you can submit multiple FHSS determination requests, you can only submit one release request. There is no option to cancel it, withdraw it or object to it after it has been submitted. If the amount that you have received is in accordance with the information you provided, it is correct.

For more information about applying to release your savings, refer to the FHSS scheme page on our website.

If you don't think that it is correct and you think that we have made a mistake, we recommend that you get in touch with us. Our contact details are on our website.

Sorry we can't be more helpful.

Thanks, ChrisR

FHSS determination is missing some voluntary concessional contributions

JG99 — Tue, 04 Feb 2020 00:17:09 GMT

Hello:

I just received my FHSS determination from the ATO and noticed that 6 months of voluntary concessional contributions (salary sacrifice) have not been taken into account. How do I fix this? Is there a ATO form to submit for this purpose? What evidenciary documents would I need to provide?

Thank you!

Re: FHSS Withdrawl

QSuper — Mon, 03 Feb 2020 23:42:10 GMT

The FHSS maximum release amount is the sum of your eligible contributions, taking into account the yearly and total limits, and associated earnings.

This amount includes:

100% of eligible non-concessional contributions
85% of eligible concessional contributions
associated earnings calculated on these contributions using a deemed rate of return – this is based on the 90-day Bank Bill rate plus three percentage points (shortfall interest charge rate).

The FHSS maximum release amount takes into account the $15,000 limit from any one year and $30,000 total limit to the total contributions across all years when calculating the eligible contributions, before adding the associated earnings.

You can request a release of the FHSS maximum release amount provided in your FHSS determination or choose a lower amount.

Please keep in mind, once you have requested a release you can't request another one, even if you have requested an amount less than your FHSS maximum release amount.

For the steps required to release your funds, please take a look at the ATO’s Applying to release your savings page.

Thanks,

Mark

Re: Releasing FHSS amount after signing contract

internetdisc — Mon, 03 Feb 2020 22:24:09 GMT

That's great to hear that they sorted it out for you too. For me they took two weeks to have the funds to arrive.

Happy searching your first dream home. Cheers.

Once money is released

marciosilvarj — Mon, 03 Feb 2020 12:19:19 GMT

Hi,

I got the determination letter, signed a contract to buy a house, got the mortgage sorted and I asked for my FHSSS money to be released.

In detail: The house price is $260,000.

I made $5,000 deposit (during offer), as there is no simulator of full transaction and the process using FHSSS is not 100% clear the bank is going to loan $244,250.00.

So, I have accumulated 25,500 ($30,000 - 15%) in my super using FHSSS. With earnings, maximum release amount is $26,241.00. After 17% deduction it makes clean (net) $21,780.03 to be in my bank account. After all said, I am still not sure of values in regards to FHSSS release amount, neither the mortgage manager can say.

As it is the first time I buy a property, I am still not sure about how FHSSS money can be used. It is one off.

My understand up to now:

$5,000.00 - Deposit paid.

$244,250.00 - Amount to be paid by bank to seller (I think it's a check).

$21,780.03 - FHSSS amount to be released yet and I am not sure whether it is the correct amount to be released, it may be more or less.

Total amount that is expected to be available = $271,030.03.

As you can see, there is an excess of $11,030.03 (if my math is correct).

Do I have to recontribute this $11,030.03 into my super fund to avoid issues with tax or may I use this money towards any cost involved in buying this house for example fees related to this property or even renovation/improvements of this property?

I am asking this as I could not find clear information on how to use the released amount. My understanding, since it is a saving scheme to buy the first home and I bought a house all money has to be used towards this house, either for deposit, fees, improvements, closing costs. Anything related to buy the first home.

Please, clarify if possible.

Best regards,

Marcio

Incomplete tax return & FHSS

dottyfrog — Mon, 03 Feb 2020 11:36:21 GMT

Hi all,

Are there any negative consequences for not having completed my 2017/18 & 2018/19 tax returns when withdrawing my FHSS contributions in 2019/20 financial year?

Thanks,

dottyfrog

Re: Releasing FHSS amount after signing contract

marciosilvarj — Mon, 03 Feb 2020 11:25:27 GMT

Hi,

Thanks for answering.

I issue was sorted after calling ATO option 1 and then 2.

They inserted the contract signature date internally, then the attendant gave me a reference number.

Later, I checked in MyGov website. It seems sorted. I could see my contract signature date that I could not enter. Today, I called my super fund and they confirmed that they got the release request from ATO.

Best regards,

Marcio

Re: Releasing FHSS amount after signing contract

internetdisc — Mon, 03 Feb 2020 11:11:28 GMT

I called them, the ATO super specialist told me to ignore that as far as follow the rules of the latest ATO rulings

Withdrawing same year contributions were made

dottyfrog — Mon, 03 Feb 2020 10:45:07 GMT

Hi all,

Am I able to withdraw personal contributions in the same financial year they were made and still claim the deduction on my FY2020 tax return?

Cheers,

dottyfrog

FHSS Withdrawl

Badru — Mon, 03 Feb 2020 09:19:21 GMT

Hi everyone,

What is the maximum withdrawal I can make from the FHSS Scheme in one financial year?

For example:

In 2019, I contribute $15,000 (salary-sacrificed, through employer).

In 2020, I contribute $15,000 (salary-sacrificed, through employer).

Now if I am buying a property, say in 2021, can I withdraw the $30,000 at one go, or do I have a maximum limit on how much I can withdraw in one financial year (e.g. maximum I can withdraw in 2021)?

Thank you.

transfer to SMSF

Wilson888 — Tue, 04 Feb 2020 04:07:41 GMT

Hi,

When a property has been approved by the council for Boarding house, can this property be transferred to SMSF direct? Currently, the property title is under husband and wife name and has not been constructed yet. The intention to transfer to SMSF, because this property is going to be used as an income for retirement later on. The owner age about 53 and 54 years. The property is as a Principle of Resident home.

What is the implication. eg. taxes, CGT, Duties, GST, loan to construct?

I have been advised that some of them say yes I can, other say no.

Re: Releasing FHSS amount after signing contract

NateH — Mon, 03 Feb 2020 01:30:00 GMT

Hi @maciosilvarj,

Are you still experiencing this issue? We would recommend you get in contact with us over the phone so somebody can look into your record.

Thanks, NateH

Re: Do concessional contributions above $25k count towards FHSS

NicolaC — Fri, 31 Jan 2020 00:25:42 GMT

under the first home super saver (FHSS) scheme, you would be able to apply for the release of your $15,000 salary sacrifice contributions (2019-20) and $15,000 salary sacrifice contributions (2020-21) as these amounts total the $30,000 limit across all years. You will also receive an amount of earnings that relate to those contributions. You are unable to request the release of amounts for the 2018-19 year as no eligible voluntary contributions have been made.

Re: FHSS Timing

NicolaC — Thu, 30 Jan 2020 06:19:52 GMT

thanks for picking this up, you're right, it's for the home not the land. We've updated our response.

There's also another FHSS conversation over here that you might find helpful: Purchase house to be demolished immediately to build new house

Re: FHSSS

NicolaC — Thu, 30 Jan 2020 03:24:06 GMT

same as your previous post, I'd recommend contacting us to find out what's going on.

NicolaC

Re: FHSSS release

NicolaC — Thu, 30 Jan 2020 03:21:35 GMT

Hi there are a number of reasons why there might be a delay. I'd recommend contacting us to discuss your specific situation.

All the best,

NicolaC

Re: FHSS marginal rate determination/interest calculation/interest over or under super investments?

mesana — Thu, 30 Jan 2020 00:55:13 GMT

ok being able to nominate higher or lower is cool.... does this mean you could choose lower to boost your deposit amount and then cop the extra tax later?

Re: FHSS marginal rate determination/interest calculation/interest over or under super investments?

NicolaC — Thu, 30 Jan 2020 00:52:22 GMT

we've just updated our earlier post about how the marginal tax rate is determined as we noticed an error in our advice.

Re: FHSS Scheme contributions, tax and timeframes

NateH — Thu, 30 Jan 2020 00:30:50 GMT

Hi ,

When you apply for a determination through our online services it is practically instant. The determination will appear on your screen as soon as you request it.

Thanks, NateH

Re: First home super saver scheme (FHSSS) and owner-builders

Brett00j — Wed, 29 Jan 2020 06:21:49 GMT

Hi ATO Community.

I am in a similar situation were I want to use my FHSS funds as an owner builder. I have contacted the ATO a few times and they wont/can't give me an answer and instead instructed me to write a letter (which should be answered in 28 days). I can't really afford to wait 28 days hence this query. I am hoping to use this post in my next conversation as it may be a bit easier to follow, but any help and clarification is much appreciated.

I have done some research and do not agree with the previous answer provided as per the following;

CGT Asset definition -

Income Tax Assessment Act 1997, section 108-5 CGT asset is;

108-5(1) A CGT asset is:

(a) any kind of property; or

108-5(2) To avoid doubt, these are CGT assets:

(a) part of, or an interest in, an asset referred to in subsection (1);

Therefore, by this definition a contract to construct the foundations of the residential building is a contract to construct part of a CGT asset, which in accordance with 108-5(2) is classified as a CGT asset. Therefore, as an Owner Builder I believe you are entering into a contract to construct a CGT asset when you sign a contract with a subcontractor to construct the foundations, or any other part of the building for that matter.

Additionally, The Home Builders Contract Act 1991 defines a contract, construct and building work as per below. Therefore, as long as you enter into a contract with your subcontractor that complies with this act, you effectively enter into a contract to construct part of a home. Which by the previous definitions is a contract to construct a CGT asset that is a residential premises, thereby qualifying you use the FHSS.

Definitions from the Home Building Contracts Act 1991

construct in relation to a dwelling means perform any work
commencing with the preparation of the site and ending with the
completion of the dwelling (including any associated work)

home building work means the whole or part of the work of —
(a) constructing or re-constructing a dwelling including an
existing dwelling and/or strata-titled dwelling; or
(b) placing a dwelling on land; or
(c) altering, improving or repairing a dwelling, including a
strata-titled dwelling; or
(d) constructing or carrying out any associated work in
connection with —
(i) any work referred to in paragraph (a) or (b); or

(ii) an existing dwelling, including a strata-titled
dwelling;

home building work contract means a contract between a
builder and an owner for the performance by the builder of
home building work, but does not include —
(a) a cost plus contract;
(b) a contract for the performance of home building work —
(i) for a builder who is in turn obliged to perform
the work under another contract; or
(ii) if the amount stated in the contract as being
payable under the contract for the work is
$6 000, or such other amount as is prescribed, or
less; or
(iii) if the amount stated in the contract as being
payable under the contract for the work is
$200 000, or such other amount as is prescribed,
or more;

Thanks

Brett

Re: FHSS - after re-contributing

NateH — Wed, 29 Jan 2020 00:59:10 GMT

Hi ,

You can only apply for a release of FHSS funds once, because you have already requested a release of your funds you would not be eligible for a second release.

If you have not found a property within 12 months we will automatically grant a 12 month extension.

Thanks, NateH

FHSSS

Ants1985 — Tue, 28 Jan 2020 20:21:50 GMT

Why is my FHSSS release amount not been funded to me or back to my account

Re: Releasing FHSS amount after signing contract

marciosilvarj — Tue, 28 Jan 2020 11:33:29 GMT

Hi,

I am having the same issue. I got a determination letter on 04/01/2020, then I signed the contract on 22/Jan/2020 and today (28/Jan/2020) I requested to release FHSS amounts.

Once I enter the contract date of 22/Jan/2020, I get the following message: "You cannot have contract date before request release date".

The only date that I can proceed is 28/Jan/2020 which is wrong.

Best regards,

Marcio

FHSS - after re-contributing

KK2 — Tue, 28 Jan 2020 10:55:38 GMT

I am looking for some guidance around what happens after a FHSS release is made, but the funds are returned to the super account within 12 months due to not being utilised to purchase a home. After the funds are re-contributed to super, is it possible to continue adding voluntary contirbutions to further increase the FHSS to the maximium limits? Additionally, could an individual re-apply later for a 2nd disbursement of the FHSS to utilise to purchase a home (given the first release was returned). In my example, the contract fell through and we do not wish to rush into purchasing a different property, so thinking we could return the funds to our super and continue saving, with a view to releasing the funds again later.

Alternatively, are extensions granted if a suitable property is unable to be identified and a contract made within 12 months of the release request?

Thanks

FHSSS release

Ants1985 — Tue, 28 Jan 2020 10:27:51 GMT

I've requested a determination on my FHSSS and had it approved. The Money was taken out of my super 4 months ago from that approval. I requested a release of my super savings to me in December yet I still don't have the money. How much longer until they release my super to me?

Re: FHSS scheme

Biggiesmalls — Mon, 27 Jan 2020 23:14:02 GMT

To be eligbile for the scheme you must have not previously owned property in Australia ....

Never owned property in Australia – this includes an investment property, vacant land, commercial property, a lease of land in Australia, or a company title interest in land in Australia (unless the Commissioner of Taxation determines that you have suffered a financial hardship.)

https://www.ato.gov.au/Individuals/Super/Withdrawing-and-using-your-super/First-Home-Super-Saver-Scheme/#Eligibilityforthescheme1

FHSS scheme

Minggo — Mon, 27 Jan 2020 09:32:56 GMT

Hi, I have a question about the FHSS scheme.

I bought an apartment 2 years ago and I am still paying the loan for it. I am thinking in the future to buy an actual house and I wonder if I can apply for the FHSS scheme, I'd read about it and in my understanding this scheme only for those first home buyers. But I just want to know what about for those people who'd never apply for this scheme before, can I still eligible for the FHSS scheme?

Re: FHSS Scheme contributions, tax and timeframes

george1123 — Thu, 23 Jan 2020 04:26:47 GMT

Hi ATO

I understand we cannot sign a contract until the determination is made? How long does it take to receive a determination from the ATO?

We would like to take advantage of the tax benefits by making lump sum concessional contributions with our current savings. We are planning to bid at an auction in a couple of weeks.

Thanks,

George

Re: FHSS Taxed Non-Concessional Amount

Marco85 — Thu, 23 Jan 2020 00:34:13 GMT

Hi ,

Thank you for your reply.
I doubt I have any debts with commonwealth agencies since I move to Australia less than a year ago.
I am quite ignorant in the matter, and I might have erroneously claimed a deduction for my $15,000 contribution.

Do you think I can recover the "lost" money?

Re: FHSS Taxed Non-Concessional Amount

KylieS — Wed, 22 Jan 2020 21:47:40 GMT

HI ,

A couple of things may have affected the amount. If you have claimed a deduction for any of the contributions this would change them to concessional contributions, which means only 85% is released. If you ad any debts with any commonwealth agencies, they would be paid before the money is released to you.

If neither of these situations apply I would suggest checking with your super fund.

KylieS

Re: Do concessional contributions above $25k count towards FHSS

KylieS — Wed, 22 Jan 2020 20:37:33 GMT

Hi ,

We will check into this one and get back to you.

KylieS

Re: FHSS release timing

KylieS — Wed, 22 Jan 2020 20:25:10 GMT

Hi ,

You can use the money to pay for either.

The important requirement is that you apply for and receive a FHSS determination from us before signing a contract for your first home or applying for release of your FHSS amounts.

Check out the important things you should know.

Thanks

KylieS

Re: FHSS marginal rate determination/interest calculation/interest over or under super investments?

KylieS — Wed, 22 Jan 2020 04:03:53 GMT

Hi ,

Thanks for your patience while we checked this out.

Contributions available for release are capped and will be increased by associated earnings. The amount of earnings calculated is a ‘notional’ amount using the shortfall interest charge (SIC) rate, not what a super fund may have provided as actual earnings.

Individuals could only apply for a release under the FHSS scheme from 1 July 2018, but use contributions made from 1 July 2017.

The method for calculating associated earnings uses the following periods;

• for contributions made in 2017/18, from 1 July 2017 to the date of the determination, and
• for contributions made in later financial years, from the 1st day of the month the contribution is made to the date of the determination.

The calculation is done on a compounding basis, so regardless of whether the contribution is made in 2017/18 or a later year, the longer it is left in superannuation the higher the earning capacity.

If the actual investment earnings of a fund is greater than the ‘notional’ amount calculated by the ATO, then the difference remains in your superannuation account.

Thanks KylieS

Re: Off the plan Purchase - FHSSS Eligibility

Biggiesmalls — Wed, 22 Jan 2020 02:02:20 GMT

Changes to the FHSS came into effect recently see here on the website - https://www.ato.gov.au/Individuals/Super/In-detail/Important-changes-to-the-First-home-super-saver-scheme/

If you applied for and received a determination before signing the contract you will still be eligible. See here

You must apply for and receive a FHSS determination from us before signing a contract for your first home or applying for the release of your FHSS amounts.

You can sign a contract to purchase or construct your home either:

from the date you make a valid request to release your FHSS amounts
up to 14 days before you make a valid request to release your FHSS amounts.

You no longer have to wait until the first FHSS amount is released to you to sign a contract to purchase or construct your home.

Off the plan Purchase - FHSSS Eligibility

EllisFell — Tue, 21 Jan 2020 23:47:47 GMT

Hi,

Can some please help me with understanding eligibility. I can't seem to find an answer anywhere or from anyone.

I am a first home buyer and I put a 10% deposit down for an off the plan apartment in 2017. It is expected to be completed late this year - 2020. I want to take advantage of the FHSSS for the remainder of the time by salary sacrificing and using the tax breaks in this scheme but I am unsure if I am eligible as I have already signed a contract for purchase. I have not approached a lender about a mortgage. Does my signing of the purchase contract make me ineligible?

Thanks

FHSS Taxed Non-Concessional Amount

Marco85 — Tue, 21 Jan 2020 05:38:11 GMT

Hi,

I have moved to Australia on a permanent residency visa at the end of June 2019, thus I did no lodge any Tax return for the financial year 2018/19. On the 12th of August I have put $15,000 from my savings into my superannuation fund (non-concessional contribution), with the intention of applying for the First Home Buyer super scheme later on.

Just before Christmas I have applied for the determination and release of the $15,000. However determination reported I could claim only $12,965. In addition, just yesterday I have received a notification from ATO that the actual funds released (after tax) are $10,761.

I had a chat with ATO phone support and I've been told I did something wrong, and that I had to double check with my super fund.

I did check, and the $15,000 I have initially put in my super fund have been classified as "After Tax", and not from income, thus non-concessional.

What can I do to receive the money that have been removed?

Thank you,

Marco

Re: FHSS marginal rate determination/interest calculation/interest over or under super investments?

KylieS — Tue, 21 Jan 2020 03:11:30 GMT

Hi ,

Yes that is correct.

KylieS

Re: FHSS Determination

KylieS — Tue, 21 Jan 2020 03:02:03 GMT

Hi ,

We have been advised that because the contributions are all concessional ( voluntary contributions turn into concessional contributions when a deduction is claimed). This means that only 85% of the total contributions count.

The total contributions are $24,592 but only 85% of them count which gives you $20,903.20.

This information is under the heading Maximum release amount.

KylieS

Re: FHSS tax calculation

KylieS — Tue, 21 Jan 2020 01:02:17 GMT

Hi ,

Yes, you can:

make two $15,000 voluntary contributions
submit first home super saver (FHSS) determination and release requests.

Check out the FHSS information, how the released amount is taxed is under the heading Withholding tax.

Check out the tax rates for your income - rates for income over 37,000 are 19% plus Medicare 2%.

Thanks

KylieS

Do concessional contributions above $25k count towards FHSS

goteDeath — Mon, 20 Jan 2020 06:04:41 GMT

My compulsory employer super contributions are around $12k per year so I cannot salary sacrifice $15k in a year and stay within the general concessional contribution cap of $25k.

However, I have unused concessional cap amount of about $13k accrued from 2018-19 that carries forward. Is it ok to use some of this unused amount for contributions towards the FHSS scheme? For example, if I salary sacrifice $15k this year (using $2k from the unused amount from 2018-19), and do the same in 2020-21, can I withdraw $30k (plus associated earnings) under the FHSS scheme?

Hope that makes sense. I've laid out the details year by year below.

2018-19

General concessional contribution cap: $25k
Concessional contributions made
- Compulsory employer contributions: $12k
- Other: $0

2019-20

General concessional contribution cap: $25k
Total unused available cap accrued: $13k
Concessional contributions made
- Compulsory employer contributions: $12k
- Salary sacrifice contributions: $15k

2020-21

General concessional contribution cap: $25k (assuming no change)
Total unused available cap accrued: $11k
Concessional contributions made
- Compulsory employer contributions: $12k
- Salary sacrifice contributions: $15k

Re: FHSS marginal rate determination/interest calculation/interest over or under super investments?

mesana — Mon, 20 Jan 2020 00:45:44 GMT

ok, so essentially if you change to a much higher paid job in the year you withdraw, you could get hit with a tax bill because of this? This is important info for budgeting appropriately

Re: FHSS marginal rate determination/interest calculation/interest over or under super investments?

KylieS — Thu, 30 Jan 2020 00:50:44 GMT

Hi ,

Withholding tax is calculated at either

your expected marginal tax rate, including Medicare levy, less a 30% offset
17% if the Commissioner is unable to estimate your expected marginal rate.

Your expected marginal tax rate will be calculated based on your previous tax return after taking into account your assessable FHSS released amount.

When you request the release of your FHSS amount via myGov, your estimated withholding tax rate will be shown. You can increase or decrease the withholding tax rate to reflect your current circumstances. This means if your income has changed in the year in which you request the release you can nominate a withholding tax rate that is higher or lower than the tax rate we have estimated.

Check out the information under Withholding Tax.

We will look into your other two questions and get back to you as soon as we can.

Thanks

KylieS

Re: FHSS Timing

mesana — Sun, 19 Jan 2020 23:41:43 GMT

that doesnt really help matters. isn't FHSS for the home, not the land? and if there are multiple stages of contracts for building a home, you should be able to say which one is the one you want to know about.

FHSS release timing

Bethk12 — Sat, 18 Jan 2020 22:22:32 GMT

Hello,
I have been contributing to the FHSS via salary sacrifice into my super account.
My partner has already released his funds. We have suddenly stumbled upon a house that we love, and want to make an offer. Does my FHSS release have to be used for the initial deposit? Or can I apply it at the 30 day settlement date if our offer is accepted?
Also, my employer contributes my super monthly, so some of my contributions haven't been added yet. Do they just have to stay in my super account now?

Re: Building a home

KylieS — Thu, 16 Jan 2020 20:52:46 GMT

Hi ,

Thanks for your patience.

Your Tiny home would be eligible as long as you are signing a contract to construct the house.

As it would meet the FHSS requirements.

Thanks

KylieS