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If One could NOT purchase property in the first 12 months of withdrwaing FHSS(due to COVID-19)

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Replies 5

Hi,

My Question is related to FHSS, if one could NOT purchase property within stipulated 12 months since withdrwaing their FHSS, do you get an automatic extension of another 12 months by ATO?

We withdrew FHSS late last year but since Mid-March we have stopped going for house inspections(due to COVID-19) and hence have not been able to purchase our property yet. We called up ATO today morning and were told that if we donot notify ATO about any purchase, one automatically gets another 12 months extension by default. Just wanted to be sure that we have recieved the right information from ATO about 12 months extension?

Could this be confirmed that I have received correct information over the phone by ATO Please ?

1 ACCEPTED SOLUTION

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Most helpful response

ATO Community Support

Replies 3

Hi @Abhishek123

 

That is correct. If you do not sign a contract to purchase or construct a home within 12 months from the date you requested a release:

  • we will grant you an extension of time to do so for a further 12 months (the law does not allow us to extend past the extra 12 months). There is no need to apply for this extension, it will be automatically granted to you and we will notify you of this
  • you can recontribute an amount into your super fund(s). This amount must be a non-concessional contribution and be at least equal to your assessable FHSS released amount, less any tax withheld. This amount is stated in your payment summary, and may be less than the total amounts released to you
  • you can keep the released amount and be subject to FHSS tax. This is a flat tax equal to 20% of your assessable FHSS released amounts and not the total amount released.

Don’t forget to notify us when you sign a contract or recontribute.


For more information please go to our website under after your savings have been released.


Thanks.

 

 

5 REPLIES 5

Most helpful response

ATO Community Support

Replies 3

Hi @Abhishek123

 

That is correct. If you do not sign a contract to purchase or construct a home within 12 months from the date you requested a release:

  • we will grant you an extension of time to do so for a further 12 months (the law does not allow us to extend past the extra 12 months). There is no need to apply for this extension, it will be automatically granted to you and we will notify you of this
  • you can recontribute an amount into your super fund(s). This amount must be a non-concessional contribution and be at least equal to your assessable FHSS released amount, less any tax withheld. This amount is stated in your payment summary, and may be less than the total amounts released to you
  • you can keep the released amount and be subject to FHSS tax. This is a flat tax equal to 20% of your assessable FHSS released amounts and not the total amount released.

Don’t forget to notify us when you sign a contract or recontribute.


For more information please go to our website under after your savings have been released.


Thanks.

 

 

Enthusiast

Replies 2

Hi team,

 

What if you have withdrawn the amount, gotten the automatic 12 month extension AND THEN due to COVID-19 have been unable to purchase?

 

One scenario is that comes to mind is that when an original withdrawal happened , it was based on the original rules that you had to declare AND withdraw prior to purchasing - including auctions. 

 

The rules were then changed by Government, to allow people to only declare, and then withdraw once signing had been completed.

 

I foresee this impacting a few people, is commissioner's discetion available here? or are these people to be penalised.

Initiate

Replies 1

@itbusinessowner   Ergh this is exactly what happened to me too, it's so frustrating!

Community Moderator

Replies 0

Hi @itbusinessowner and @Macj

 

Based on the current rules, you have a maximum of 24 months (12 months plus 12 months) from the date you requested your FHSS release to the date you sign your home purchase or construction contract.

 

While there are a number of measures that have been introduced, e.g. early release of super, no changes have been made to the FHSS scheme due to COVID-19. If that changes, we will update our website accordingly.

 

If you don't sign a contract within the required timeframe, you can avoid the FHSS tax by re-contributing the assessable FHSS released amount (less tax withheld) and notifying us that you have done that.

Former Community Support

Replies 0

Hi @Abhishek123,

 

After consultation with our technical team, we have updated our original response.