Commonwealth Parliament Introduces Legislation for First Home Super Saver Scheme

Tuesday 12 September 2017 @ 8.29 a.m. | Legal Research

The Federal Government has introduced a set of Bills on 7 September 2017 which aim to implement the First Home Super Saver Scheme (‘FHSSS’) and also assist older Australians in downsizing. These measures are part of the Government’s budget policy released earlier this year.

The First Home Super Saver Scheme (‘FHSSS’)

Earlier in the year, the FHSSS was introduced in theGovernment's Federal Budget Plan for 2017-18. Under the proposed legislation, first home buyers will be able to The FHSSS will apply to voluntary superannuation contributions of up to $15,000 per year, and and $30,000 in total, made from 1 July 2017. These contributions will be able to be withdrawn for a home deposit from 1 July 2018.

Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No.1) Bill 2017 (Cth)

This Bill proposes to establish the First Home Super Saver Scheme (FHSSS), which will allow individuals who are saving for their first home to take advantage of the concessional taxation arrangements. Under the proposed legislation, first home buyers who satisfy certain criteria can apply for a determination by the Commissioner stating the maximum release amount from a superannuation fund. The criteria are:

  • Never held a freehold interest in real property in Australia, a lease of land in Australia or a company title interest in Australian land;
  • 18 years and older;
  • No previous requests for release authority in relation to a first home super saver determination.

While there are proposed limits on the amount of contributions that are eligible for release, the FHSS maximum release amount is proposed to comprise eligible non-concessional contributions, 85% of eligible concessional contributions and other associated earnings.

First Home Super Saver Tax Bill 2017(Cth)

This Bill proposes that first home super saver tax payable under section 313-60 of the Income Tax Assessment Act 1997 (Cth)  will be imposed. The amount of the first home super saver tax will be 20 percent of the person’s assessable first home super saver released amount, which is to be defined within the meaning of the Income Tax Assessment Act 1997 (Cth).

Minister’s Statement

MP Michael Sukkar, Assistant Minister to the Treasurer, noted in his second reading speech that the Bill was aimed at helping first-time home buyers to purchase their first property. He said:  

“Australians are entering the housing market later in life than previous generations and home ownership is falling out of reach for many younger Australians. With house prices high, difficulty saving a deposit is a key barrier to getting into the market. That's why the changes contained in this bill are essential and why we need to act now. The government, in these bills, will help Australians boost their savings for their first home by allowing them to build a deposit inside superannuation.”

He also noted that the Bills would allow older Australians to downsize.

Treasurer Scott Morrison’s statement on the budget from 7 May 2017 revealed that the current government had a comprehensive plan to address issues related to hosing. He stated:

“We will empower first home buyers to save for their first home by allowing them to build a deposit inside their superannuation. They will be able to access generous tax concessions to build more savings faster.”

In addition the Government will be addressing the issue of foreign investors in two other separate Bills.

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products. Nothing on this website should be construed as legal advice and does not substitute for the advice of competent legal counsel.

Sources:

Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No.1) Bill 2017 (Cth), second reading speeches and other associated materials, as published on Timebase LawOne.

First Home Super Saver Tax Bill 2017 (Cth), second reading speeches and other associated materials, as published on Timebase LawOne.

Ashlynne McGhee, Monique Ross and Simon Elvery, 'Federal budget 2017: Winners and losers,' (ABC News) 9 May 2017.

The Hon Scott Morrison MP, 'Reducing pressure on housing affordability: Joint media statement with The Hon. Michael Sukkar MP, Assistant Minister to the Treasurer,' (media release) 9 May 2017.

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