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Re: FHSSS Withholding Tax and New Tax Brackets

I'm new

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Replies 2

With the recent tax cuts my marginal tax rate is droping from 39% to 34.5%.

If I request a  FHSS relase now will the withdrawl be taxed at my new rate of 4.5% or do I need to wait until the tax tables are updated?
If so, how will I know when this happens?

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Most helpful response

Community Manager

Replies 0

Hi @PeterB77 

 

Thanks for you patience, we have heard back from our technical team about this.

 

We are in the process of updating our systems to accommodate the new tax rates – we expect the change to be made in the next 1-2 weeks.

 

In the interim, we provide the following information, which is based on the assumption that an individual is in the 39% tax bracket, based on the old tax rates.

 

If a FHSS release request is made today, the release request will show a calculated tax rate of 9% (39% less the 30% tax offset). This will show on the FHSS release request as the calculated tax rate. There is the option of nominating a different withholding tax rate (other than 9%) by updating the 9% to a new rate. Therefore, in the interim, a lower withholding tax rate can be nominated to ensure the FHSS withholding tax is calculated based on the new tax brackets.

 

As a reminder, it’s important that if you are intending on signing any property contract, that you request your final FHSS determination before doing so. You can make release request now or within 14 days of signing a contract. Delaying your FHSS release request in this situation, may result in you not being eligible to use the scheme.

 

Please refer to our website for further information about the timing of FHSS determinations and release requests.

 

Thanks, Nate

2 REPLIES 2

Community Moderator

Replies 0

Hi @PeterB77 

 

We will check this out and let you know.

Most helpful response

Community Manager

Replies 0

Hi @PeterB77 

 

Thanks for you patience, we have heard back from our technical team about this.

 

We are in the process of updating our systems to accommodate the new tax rates – we expect the change to be made in the next 1-2 weeks.

 

In the interim, we provide the following information, which is based on the assumption that an individual is in the 39% tax bracket, based on the old tax rates.

 

If a FHSS release request is made today, the release request will show a calculated tax rate of 9% (39% less the 30% tax offset). This will show on the FHSS release request as the calculated tax rate. There is the option of nominating a different withholding tax rate (other than 9%) by updating the 9% to a new rate. Therefore, in the interim, a lower withholding tax rate can be nominated to ensure the FHSS withholding tax is calculated based on the new tax brackets.

 

As a reminder, it’s important that if you are intending on signing any property contract, that you request your final FHSS determination before doing so. You can make release request now or within 14 days of signing a contract. Delaying your FHSS release request in this situation, may result in you not being eligible to use the scheme.

 

Please refer to our website for further information about the timing of FHSS determinations and release requests.

 

Thanks, Nate