Using your super to buy your first home
Are you a first home buyer scrambling to find a way to afford your dream home?
Well thousands of Australians are missing out on an easy way to save for their first home!
The First Home Buyers Super Saver Scheme was introduced in 2018 to reduce pressure on housing affordability, and it allows buyers to use their superannuation as a way to save for a home deposit. The popularity of this scheme has been quite low, with barely over 15% of first home buyers using this scheme to access money for a deposit last year.
The First Home Buyers Super Saver Scheme allows first home buyers to access their super systems tax breaks while effectively earning interest at a government-set rate at 3.1% per year. Most high-interest banks will only pay 0.5%, which makes saving via the scheme a much better deal.
Basically, you can make voluntary concessional (before-tax) and voluntary non-concessional (after-tax) contributions into your super fund to save for your first home.
Because the interest rate is higher, you will accumulate positive income, far more than you would if you left your savings in your regular accounts. You are then able to release those funds as well as well as the extra that had built up thanks to the high interest rates and put that towards your first home deposit.
By using pre-tax income, the earnings rate can be more than six times higher than you would normally get in the bank.
The First Home Buyers Super Saver Scheme is only available to eligible first home buyers. Eligibility relies on two main factors. You either live in the premises you are buying or intend to as soon as practicable. Or you intend to live in the property for at least six months within the first 12 months you own it after it is practical to move in.
The First Home Buyers Super Saver Scheme is also assessed on an individual basis, therefore couples can have access to the scheme individually for the same property Even if one person is not eligible, the other can still access theirs.
Concessional contributions tend to be more attractive as they are tax deductible. For example, you could arrange to salary sacrifice some of your pre-tax income into your super for the purpose of taking the money out again when you’re ready to buy your home. You also could deposit money into super before the end of the financial year so that you can claim a personal tax deduction for the contribution.
One of the biggest things to keep your eye out for and ensure before you start embarking in this scheme, is that your specific super fund participates in the First Home Buyers Super Saver Scheme in the first place.
You are restricted to investing up to $15,000 per year, with a maximum lifetime sum of $30,000. These contributions must also be under the usual super contribution cap limits.
For concessional contributions, this currently sits at $25,000 a year (which includes your employee’s required 9.5% compulsory payments). For non-concessional contributions, this currently sits at $100,000 a year.
The main difference is that while a concessional contribution is tax-deductible, at least 15% in tax will be deducted. A $10,000 concessional contribution ends up as $8,500 in your account.
If your contribution is not concessional and no tax deduction is claimed, no contributions tax is applied, a $10,000 contribution stays that amount in your account.
Generally, the concessional contribution ends up being better in the long term as you will pay less tax collectively and could potentially boost your personal tax return. Either way, only voluntary contributions count for the First Home Buyers Super Saver Scheme (ie. employer super guarantee amounts cannot be released under the scheme)
You will only be able to access the First Home Buyers Super Saver Scheme money once you are actually ready to buy your home. You will need to access the money before you sign the contract or within 28 days after. If for some reason you access the money but don’t proceed, you will need to return it to your super fund in order to avoid FHSS tax being applied.
While you will not avoid being taxed once you access the money from your First Home Buyers Super Saver Scheme, the amount you are taxed is considerably less than normal rates, including a 30% tax offset.
For more information on the First Home Buyers Super Saver Scheme, please contact us!
Phone: 08 6336 6200
Email: info@ascentwa.com.au
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If your business interacts with the public in any way (from welcoming customers into your shop to visiting client sites) then public liability insurance isn’t just “nice to have.” It’s essential protection. Whether you’re a sole trader, a café owner, or running a construction company, public liability insurance helps safeguard your business against unexpected (and often costly) accidents. What Is public liability insurance? Public liability insurance covers your business if a member of the public suffers injury, death, or property damage as a result of your business activities. In simple terms, it’s there to protect you financially if something goes wrong—such as a customer slipping in your store, a tradie damaging a client’s property, or a product you sell causing harm. Without it, you could be personally liable for significant compensation and legal costs. What does it cover? A typical policy covers: Injury or death to a third party caused by your business operations. Damage to property belonging to someone else. Compensation and legal costs you’re ordered to pay following a covered claim. For example, if a customer trips over a cable in your office or a carpenter cracks a client’s TV while working onsite, public liability insurance steps in to cover the costs. What isn’t covered? While every policy is different, public liability insurance usually won’t cover: Damage involving vehicles. Defective work. Breach of professional duty or negligence in advice (that’s covered by professional indemnity insurance). Defamation or advertising liability. Understanding these exclusions helps you choose the right combination of cover for your business. Who needs public liability insurance? If your business has any level of public interaction, you likely need it. Common examples include: Customer or supplier visits: If anyone comes to your premises or you work on theirs. Public events: Markets, expos, and pop-ups. Retail, trade, and construction: High public contact increases your risk. Leased premises: Many shopping centres and landlords require proof of cover. Contractor or license requirements: Many trade licenses (like electricians and plumbers) require it to operate. Even if it’s not legally required, most Australian businesses choose to have public liability insurance for peace of mind. How much cover do you need? The level of cover depends on your industry, business size, and risk exposure. Most businesses opt for between $5 million and $20 million. It’s worth reviewing your policy regularly, especially if your operations expand or you start working in new environments. Is it compulsory in Australia? Public liability insurance isn’t legally mandatory for all businesses, but some industries and licences make it a condition of operation. For example, in Queensland, electrical contractors must hold a minimum of $5 million in public and product liability cover. Similarly, councils or venue owners may require proof of insurance before approving an event or leasing a space. Don’t risk a law suit. Being sued for negligence can be financially devastating. Even a minor incident can mean you lose hundreds of thousands—not to mention the impact on your brand and business reputation. Public liability insurance ensures your business can keep operating, even when the unexpected happens. If you’re unsure whether your current cover is adequate, our team at Ascent Accountants can help you review your business risks and recommend the right level of protection for your situation. Contact us today to learn more.
