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Re: Questions on FHSS - First home super scheme

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Newbie

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Hi. I have two questions around FSHH.

 

1) Can I ask for a release amount on the same financial year when I contributed the amount for the super fund? For example, I want to contribute $15k this FY17/18 before 30 Jun 2018 and I also want to contribute $15k on 1 Jul 2018, and I want to release the funds in August 18 ($30k minus 15% withholding tax). I know I can do that for the first contribution ($15k -15% tax), but not sure if with the second as well.

2) What happens if I sign a contract to buy my first home in Jun18, I have a settlement in Sep18 and I do the Super contributions in Jun18  and Jul18 to release the funds in Aug18 (as in the previous question) to pay my initial deposit and getting the associated tax benefits on both FY17/18 and FY18/19. I have read that I need to sign a contract after the funds are relased by ATO? That seems unfair, as you never know how long is going to take to buy a house. You start searching and once you've got it, then you ask release the funds. Is that so?

 

Thank you.

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ATO Certified

Devotee

Replies 5

Hi

 

Welcome the ATO Community!

 

From 1 July 2017 you can make FHSS contributions to your fund.

 

Then from 1 July 2018 onwards; yes, you can ask for a release amount during the same financial year a contribution was made. You just need to ensure they are ‘eligible’ contributions towards the FHSS. The example you’ve outlined in your first question above is possible. You can apply to release a max of $15,000 of your voluntary contributions from any one financial year (or a total of $30,000 contributions across all years), plus earnings relating to those contributions.

 

With respect to your second question, the ATO must have released FHSS amounts to you before you sign a contract to purchase or construct residential premises or you may be liable to pay FHSS tax.

 

To discuss in more detail, contact the ATO Superannuation staff on 13 10 20 between 8am and 6pm Mon to Fri AEST.

 

I hope this helps a little.

 

(Note - I am an ATO employee here voluntarily).

 

 

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Best answer

ATO Certified

Devotee

Replies 5

Hi

 

Welcome the ATO Community!

 

From 1 July 2017 you can make FHSS contributions to your fund.

 

Then from 1 July 2018 onwards; yes, you can ask for a release amount during the same financial year a contribution was made. You just need to ensure they are ‘eligible’ contributions towards the FHSS. The example you’ve outlined in your first question above is possible. You can apply to release a max of $15,000 of your voluntary contributions from any one financial year (or a total of $30,000 contributions across all years), plus earnings relating to those contributions.

 

With respect to your second question, the ATO must have released FHSS amounts to you before you sign a contract to purchase or construct residential premises or you may be liable to pay FHSS tax.

 

To discuss in more detail, contact the ATO Superannuation staff on 13 10 20 between 8am and 6pm Mon to Fri AEST.

 

I hope this helps a little.

 

(Note - I am an ATO employee here voluntarily).

 

 

Newbie

Replies 1

Hi you mentioned that if you sign a contract prior to applying for the super funds to be released you may be subject to fhss tax. What is this tax and does this mean I can still apply for the release? 

Newbie

Replies 0

Thank you. All clear. FHSS is not for me and my partner then. It's hard to know exactly when are you going to be successful in buying a house. Especially with investor buyers that take every house. Don't understand why you need to contract to be signed after the funds are released.

Thanks for you time. 

Community Support

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Hi @NIkee1,

 

Thanks for your question!

 

The FHSS tax is a flat tax rate of 20% on the assessable FHSS released amount. It may be applied if you have entered into a contract before the FHSS funds have been released, or if you haven't used the funds within 12 months from when then funds were released.

 

Your FHSS funds must be released before you enter into a contract and notification must be provided within 28days of entering into a contact and can be lodged through ATO online services.

 

If you have further questions, you can phone us on 13 10 20 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.

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Newbie

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Hi Miccles,

 

I have called ATO on 13 10 20 before and I received a different reply to the same question. I could not find clear documentation of the minimum duration the funds need to be within super before it is allowed to be released under FHSSS.

 

My question: Let's say I have made contributions of $15,000 to super by 30 June 2018. In July 2018, I make another contribution of $15,000. How much could I release under FHSSS in August 2018?

 

The response: In August 2018 (or any time after 1 July 2018), you could withdraw the equivalent of $15,000 minus tax, which is the portion contributed before 30 June 2018. But if you want to withdraw the whole equivalent amount of $30,000 (minus tax), you can only do it after 1 July 2019 (ie after FY 2018/19).

 

So the response on the phone was different to what is posted here. Is there an official ATO website or document that clearly states whether or not I could withdraw the amount deposited in July 2018 in the 2018/19 financial year? I am planning to buy in the next 6-9 months, so I would not make another contribution in the new financial year if I cannot access the funds in a timely manner. Having said that, I would still like to maximise my tax deduction as allowed by the law.

Devotee

Replies 0

Hi @creski

 

Sorry to hear that you're hearing conflicting messages - may I suggest you call again on 13 10 20 (between 8am and 6pm M-F AEST) and explain the situation again. Ask to speak with a service consultant.

 

If this still doesn't help write in, and you'll receive a response in writing that you can hang your hat on.

 

Please let me know how you go... thanks.

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