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Re: First Home Super Scheme as primary source of deposit

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Good afternoon everyone,

I'm hoping someone may be able to help guide me regarding one key aspect of the first home super saver scheme.

Will a bank/lender recognise this as the primary source of a deposit?

 

What I mean here is... let's say I want a $450,000 town house with a 10% deposit ($45k). 

  • Currently here in QLD I can get a First Home Buyers (FHB) deposit of $15k
  • I currently have about $5k in personal super contributions which can be used towards FHSS.
  • Therefore I am considering contributing another $25k over the next 2 years (and hope the first home buyers support is still available), giving me a total of $15k FHB + $30k FHSS = $45k Deposit (I realise there will be some other fees etc on top but am keeping that separate from this query).

 

I'm told the FHB will not be counted towards your deposit percentage by a lender. Does anyone know if this is the same with FHSS? I realise this is likely to be lender specific but thought I would start ask here also.

 

Thanks in advance

Damo

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Hi damotaylor,

 

The policy may differ from lender to lender, however as you are "contributing" taxable income it will be generally be counted as "Genuine Savings". From what I can tell, you will have 10% of the deposit available and borrow 90% of the home loan. In this case you will need to pay something called a Lenders Mortgage Insurance (LMI) and most lenders look for genuine savings you have contributed in the past 3 months. This means that you must have saved continuously (or held the funds in your savings/investment account) for the last 3 months before applying for a home loan.

 

(Please note you cannot withdraw the whole $30,000 as you will be taxed at your marginal tax rate - 30% tax offset).

 

In summary, the contribution whether it be concessional (before tax) or non-concessional (after-tax) will count towards as a primary source of a deposit. The reason why FHB would not count is because the funds will be entitled to you at or around settlement. 

 

I recommend you to see a mortgage broker or attend your local branch as they will be able to assist you further.

 

Hope this helps.

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Best answer

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Hi damotaylor,

 

The policy may differ from lender to lender, however as you are "contributing" taxable income it will be generally be counted as "Genuine Savings". From what I can tell, you will have 10% of the deposit available and borrow 90% of the home loan. In this case you will need to pay something called a Lenders Mortgage Insurance (LMI) and most lenders look for genuine savings you have contributed in the past 3 months. This means that you must have saved continuously (or held the funds in your savings/investment account) for the last 3 months before applying for a home loan.

 

(Please note you cannot withdraw the whole $30,000 as you will be taxed at your marginal tax rate - 30% tax offset).

 

In summary, the contribution whether it be concessional (before tax) or non-concessional (after-tax) will count towards as a primary source of a deposit. The reason why FHB would not count is because the funds will be entitled to you at or around settlement. 

 

I recommend you to see a mortgage broker or attend your local branch as they will be able to assist you further.

 

Hope this helps.