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First Home Super Saver Scheme - releasing funds

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Newbie

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Replies 5

Hi,

 

I have saved $30k to use in the first home super saver scheme. 

 

The ATO website indicates the process of releasing funds can take up to 25 business days.

I am concerned I need to sign the settlement contract of my first home purchase before the funds are received in my bank account.

 

Can I sign the a contract for purchase after I submit my application for request determination/release application but before the funds are received in my bank account, and not be liable to the 20% FHSS tax? Or must I wait to sign until the funds are physically in my bank account?

 

If I do need to wait until the funds are physically in my bank account, but still need to sign the contract, can I borrow the $30k temporarily as the 'FHSS amount' while waiting for the funds to be in my bank account? 

 

Thanks very much for your help. 

 

 

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ATO Certified

Anonymous

Replies 2

Hi @mm1995

 

If you enter into a contract to purchase property before before the commencement of the FHSS scheme or before requesting a FHSS determination you will not meet the eligibility requirements  for the FHSS .  This means that you will not be able to access funds under the scheme.

 

If after you have applied for a determination,  you enter into a contract before the ATO releases funds to you, then any assessable amounts such as concessional contributions that you made, will be subject to the FHSS tax at 20%.  This removes any benefit that you would have received from the FHSS.

 

You will know when the funds have been released, when the funds are in your nominated account or the ATO noifies you in writting that the funds have been released, for example if you have your ATO account linked to myGov you may receive an ATO message along the lines that your funds have been released.  (There may be a slight delay between the notificiation and when funds appear in your nominated account).    If you enter into a contract before these events then any assessable amounts will be subject to the FHSS tax.

 

The FHSS has been a hot topic on this forum for a while now and there is a lot of confusion about it, and its my understanding that the ATO are currently formulating a " FHSS knowledge base " for this forum which can be used as an easier reference guide than what is currently on their website.

 

Refer to this post for guidance on process of applying for determination.

 

ATO phone 13 28 61

 

 

 

 

5 REPLIES 5

Anonymous

Replies 4

Do you already have a FHSS determination or applied for one ??   Only asking as its not clear from your question, and they are two seperate processes .... 

Newbie

Replies 3

Hi MVF,

 

Thanks for the reply - I have not yet applied for FHSS determination.

I am just concerned about the timing of fund release if I do happen to come across a home I want to purchase. 

Do I have to wait until the ATO notifies they have released the funds before signing contract to purchase, or do I have to wait until the funds are in my bank account before signing contract to purchase?

 

Thank you 

 

 

Best answer

ATO Certified

Anonymous

Replies 2

Hi @mm1995

 

If you enter into a contract to purchase property before before the commencement of the FHSS scheme or before requesting a FHSS determination you will not meet the eligibility requirements  for the FHSS .  This means that you will not be able to access funds under the scheme.

 

If after you have applied for a determination,  you enter into a contract before the ATO releases funds to you, then any assessable amounts such as concessional contributions that you made, will be subject to the FHSS tax at 20%.  This removes any benefit that you would have received from the FHSS.

 

You will know when the funds have been released, when the funds are in your nominated account or the ATO noifies you in writting that the funds have been released, for example if you have your ATO account linked to myGov you may receive an ATO message along the lines that your funds have been released.  (There may be a slight delay between the notificiation and when funds appear in your nominated account).    If you enter into a contract before these events then any assessable amounts will be subject to the FHSS tax.

 

The FHSS has been a hot topic on this forum for a while now and there is a lot of confusion about it, and its my understanding that the ATO are currently formulating a " FHSS knowledge base " for this forum which can be used as an easier reference guide than what is currently on their website.

 

Refer to this post for guidance on process of applying for determination.

 

ATO phone 13 28 61

 

 

 

 

Newbie

Replies 1

This contradicts the guidance on the ATO website, that explicitly states:

  • You can sign your contract to purchase or construct your home before making a valid request to release your FHSS amounts. However, you need to have an FHSS determination before you sign and you must make a valid release request within 14 days of entering that contract.

I requested a determination prior to signing a contract to purchase and then requested release immediately after, so within 14 days as per the above advice. 

Are you able to clarify your statement that this would attract the 20% tax?


@Anonymous wrote:

Hi @mm1995

 

If you enter into a contract to purchase property before before the commencement of the FHSS scheme or before requesting a FHSS determination you will not meet the eligibility requirements  for the FHSS .  This means that you will not be able to access funds under the scheme.

 

If after you have applied for a determination,  you enter into a contract before the ATO releases funds to you, then any assessable amounts such as concessional contributions that you made, will be subject to the FHSS tax at 20%.  This removes any benefit that you would have received from the FHSS.

 

You will know when the funds have been released, when the funds are in your nominated account or the ATO noifies you in writting that the funds have been released, for example if you have your ATO account linked to myGov you may receive an ATO message along the lines that your funds have been released.  (There may be a slight delay between the notificiation and when funds appear in your nominated account).    If you enter into a contract before these events then any assessable amounts will be subject to the FHSS tax.

 

The FHSS has been a hot topic on this forum for a while now and there is a lot of confusion about it, and its my understanding that the ATO are currently formulating a " FHSS knowledge base " for this forum which can be used as an easier reference guide than what is currently on their website.

 

Refer to this post for guidance on process of applying for determination.

 

ATO phone 13 28 61

 

 

 

 



@Anonymous wrote:

Hi @mm1995

 

If you enter into a contract to purchase property before before the commencement of the FHSS scheme or before requesting a FHSS determination you will not meet the eligibility requirements  for the FHSS .  This means that you will not be able to access funds under the scheme.

 

If after you have applied for a determination,  you enter into a contract before the ATO releases funds to you, then any assessable amounts such as concessional contributions that you made, will be subject to the FHSS tax at 20%.  This removes any benefit that you would have received from the FHSS.

 

You will know when the funds have been released, when the funds are in your nominated account or the ATO noifies you in writting that the funds have been released, for example if you have your ATO account linked to myGov you may receive an ATO message along the lines that your funds have been released.  (There may be a slight delay between the notificiation and when funds appear in your nominated account).    If you enter into a contract before these events then any assessable amounts will be subject to the FHSS tax.

 

The FHSS has been a hot topic on this forum for a while now and there is a lot of confusion about it, and its my understanding that the ATO are currently formulating a " FHSS knowledge base " for this forum which can be used as an easier reference guide than what is currently on their website.

 

Refer to this post for guidance on process of applying for determination.

 

ATO phone 13 28 61

 

 

 

 


 

ATO Certified

TaxTime Support

Replies 0

Hi @dh91

 

Welcome to our Community.

 

There have been some recent changes to how the first home super saver (FHSS) scheme works. You are correct to identify that what @Anonymous said isn't correct now, however it was correct at the time it was posted.

 

If you would like to see what changed, you can check out the important changes to the first home super saver scheme page on our website.

 

One of the big changes is that you no longer have to wait until you have received your first FHSS amount before signing a contract to purchase or construct your home.

 

As you have correctly said, you are still required to apply for and receive a FHSS determination from us first, but the contract can be signed up to 14 days before submitting FHSS release request.

 

Hope this helps.

 

Thanks,

 

ChrisR

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