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Re: Signed a contract just before applying for FHSS release

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Initiate

Replies 1

It is the current affair talkback show on Triple J at 5.30pm on weeknights - they have a podcast that you can go back and listen to what they spoke about last night. The minister said they would take on board the complaints about how long the release takes... but those are just words for now.

Anonymous

Replies 0

Words for now .. but I believe that this is the begining of them making some tweeks to the FHSS release proceedures... and as more pressure builds the faster they will do it ... the Federal Government is starting to panic about some of its other policies that even members of their own party won't bakc and the last thing they need is more fuel on the fire.

Anonymous

Replies 1

@Tin @erincook

 

Here is the governments supposed reasoning for their approach on this---

 

 " The FHSS Scheme applies a post-release compliance approach to ensure that individuals have access to the amounts that they have saved under the FHSS Scheme before they are required to pay their deposit. This means that instead of requiring individuals to provide evidence that they have entered into a contract prior to amounts being released (which would likely to give rise to substantial timing and liquidity issues), individuals are simply required to purchase their first home within a specified period after amounts are released. "

Initiate

Replies 0

Yup, however that means you need to have the money released before you even start looking for a place....and then if you dont find a place quickly you would have been better off keeping the money in your super and adding to your savings... its a catch 22 in my eyes: keep saving it in there as long as you can but then when you find your dream place they dont release it in time for contracting, or take it out early and not use the scheme to its full potential. In the end its more trouble than its worth. I understand there would be some waiting time.. but 25 business days is the longest I have ever seen... its over a month!

Anonymous

Replies 3

@Tin @erincook

 

Here is a way to avoid paying the tax, but you may not like what has to be done ...  It is in a Law Companion Ruling LCR 2018/5   https://www.ato.gov.au/law/view/document?docid=COG/LCR20185/NAT/ATO/00001

 

You will need to read it to get a grasp of what has to be done ...

 

Quote -- 

 

  1. Where the requirements referred to in paragraph 26 of this Ruling are not satisfied because you entered into a contract to purchase or construct a residential premises before the FHSS released amount was released, you must make non-concessional contributions as referred to in paragraph 28 of this Ruling in order to avoid being subject to the FHSS tax. 

 

 

Tin
Initiate

Replies 2

Hi guys, 

 

Does the fact that I've entered into a contract to purchase an off the plan property have any implications? In theory I don't hold a "freehold interest" in the property as it can be cancelled by the vendor at any time withint the stipulated time frame.

 

I really don't want to pay this FHSS tax I feel like I've been so wrongly punished 

Anonymous

Replies 0

@Tin

 

This is not going to be enough, as any contract can theoretically fall through before it settles ..

 

Just wait until you get the determination, then let us know if they have taxed you and take it from there....  

 

If they do tax you it won't be easy to get the FHSS tax remitted but its also not impossible ... it will depend on how you approach the issue, your arguments and how far your prepared to take it ... 

Highlighted

Anonymous

Replies 0

As I said before you won't get far with the "off the plan argument" as they have covered that as well .. here it is ...

 

1.178 The time at which the relevant type of contract is entered into is an appropriate event for satisfying the requirement, as it is from this time that legally binding obligations about the purchase or construction are created. It also resolves the timing issues that would be associated with 'off the plan' property purchases which may take years to complete.

 

Its in here - https://www.ato.gov.au/law/view/document?docid=NEM/EM201755/NAT/ATO/00003

 

but do not give up .... as I said you don't have the determination yet ... and if they do not apply the FHSS tax I would not be putting it on here I would keep quiet about it and move on .....

 

If they do apply the FHSS tax then let us know .... 

Tin
Initiate

Replies 11

Hi @erincook

 

Just wondering whether the ATO have released your funds despite it already processed by your super fund a week ago?

 

I don't understand why it takes them so long when the money is in their account?

Initiate

Replies 5

Yes! They sent me a message saying my money was released Friday - just in time for the auction (unfortunately we were outbid though) - so that would make it 10 business days. As it was a Friday the money has not appeared in my bank yet... hopefully it will in a couple of days. Have you had any luck?
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