Definition of "holding an interest" in property with regards to first home super saver scheme

 Author: AriATO(Community Support)Community Support

ATO Certified Response4 May 2023

Hi DLS,

Thanks for waiting.

For FHSS purposes, our view is that an “interest in property” includes any type of interest in real property. This means that ‘freehold interest’ includes both legal and equitable interests. Whether the specified beneficiary or their sibling holds an interest in the property will depend on the terms of the trust deed. 

If an individual is the beneficiary of a trust and the trustee of which holds or has held real property. Then it's necessary to consider whether the beneficiary also holds or has held real property an equitable right in that real property. That gives rise to an interest set out in the FHSS Scheme law that would make them ineligible to utilise the scheme.  

The nature of a beneficiary’s interest in trust property must be determined under the terms of the particular trust. For example, the terms of a trust deed may only provide a beneficiary an interest in the income of the trust. In the case of a discretionary trust. A beneficiary will ordinarily only have an interest that amounts to ensuring the proper administration of the trust by the trustee. The nature of these interests and rights will not give the beneficiary a proprietary interest in the underlying property held by the trust estate. In contrast, the trust deed may expressly provide that a beneficiary of the trust has an interest in specific assets of the trust, or the entirety of the trust assets. 

Have a look at our FHSSS Essentials guide we've put together. Under the heading ‘Am I eligible’ you'll find handy info about eligibility and a link to GN 2018/1 which has some common scenarios.

If you need more specific advice around the FHSSS eligibility requirements you can contact us for tailored technical assistance. 

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