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Determination and Release made a day after contract signed!

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Hi,

 

I have made a huge mistake and did not read the fine print in regards to having a determination before signing a contract. After winning at auction I decided id check out how to release MY superfunds and was shocked to find out that if had not made determination request prior I would have to pay a 20% tax on my released funds.

 

How lenient are the ATO? I cant see how much difference 24 hours makes to a determination and my request for relase is still within the 14 day period.

 

Please help. I will lose out on $4500 in savings and the whole point of salary sacrificing will have been pointless as i could have had it in a savings account with my other savings!

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Hi @Sam1990

 

Welcome to our Community.

 

Unfortunately you don't meet the first home super saver (FHSS) scheme requirements.

 

There are a number of important things you need to know if you plan to use the FHSS scheme. The first is that you must apply for and receive a FHSS determination from us before signing a contract for your first home.

 

You can check out the other requirements on the first home super saver scheme page on our website.

 

We can only operate within the parameters of the relevant legislation. If you would like to, you can look at Section 138-10 of the Taxation Administration Act 1953 from our legal database for more information.

 

It is also important to note that the 20% tax applies to assessable FHSS released amounts. There are several circumstanes when this tax applies. You can find more information about first home super saver scheme on our website.

 

Sorry we can't be more helpful.

 

Thanks,

 

ChrisR

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Best answer

ATO Certified

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Hi @Sam1990

 

Welcome to our Community.

 

Unfortunately you don't meet the first home super saver (FHSS) scheme requirements.

 

There are a number of important things you need to know if you plan to use the FHSS scheme. The first is that you must apply for and receive a FHSS determination from us before signing a contract for your first home.

 

You can check out the other requirements on the first home super saver scheme page on our website.

 

We can only operate within the parameters of the relevant legislation. If you would like to, you can look at Section 138-10 of the Taxation Administration Act 1953 from our legal database for more information.

 

It is also important to note that the 20% tax applies to assessable FHSS released amounts. There are several circumstanes when this tax applies. You can find more information about first home super saver scheme on our website.

 

Sorry we can't be more helpful.

 

Thanks,

 

ChrisR

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Hi Sam 

 

I made the same mistake as you, went to an auction, not intending to bid, then the price was too good to be true and I ended up registering and winning. I signed a contract and didn't think the process of accessing my funds ($15000) would be so hard, or in my case impossible to access. I won't be able to access that money until I retire ....please someone explain how that helps me purchase my first home??? Why have you made it so difficult to access funds that people have clearly put aside to help them for their own futures. I cannot believe there is not another way to access the funds after a contract has been signed. Or an appeal process! This is unfair!  Please someone tell me how I am going to make up the balance before settlement as I was relying on this money. I also love that when you sign up or email the taxation office they send a notification "don't get scammed" Well you guys have scammed me out of $15000. And yes there is legislation, there is also common sense and when hardworking people have put money away for the purpose for saving a house and make a mistake by not asking for determination (which can someone please tell me what that is and explain why it is of the highest importance to  have that document filled in before signing a contract)? Why is there no appeal process? How can this process be changed or looked at for the future, clearly there are a lot of people making this mistake so the process and the rules and legislation for this process are CLEARLY not as CLEAR as the ATO would think. 

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Hi @rah85g,

 

Thanks for getting in touch and providing your feedback - we've received the below response from a specialist area regarding the FHSS scheme.

 

We take great care to make information available to individuals to ensure that they're aware of the requirements of the FHSS scheme including information on our website. We encourage anyone intending to use the scheme to read this material to ensure the scheme is right for them and seek advice from the ATO or their adviser if there is anything about the scheme that they need to clarify.

 

The FHSS determination confirms your eligibility for the scheme and advises the maximum amount that can be released. As such, the FHSS law requires that you must have applied for and received a FHSS determination from us before signing a contract to purchase or construct your first home in Australia. If you have signed a contract before requesting a FHSS determination you are not eligible for the scheme because you hold an interest in property when the contract is signed.

 

The FHSS law allows individuals to object to a FHSS determination after it is issued and before a release request has been made. Unless you have received a FHSS determination from us, before you sign your contract, there is no decision to be reviewed under the FHSS law.

 

Thanks, JodieH.