November 11th, 2021 by

Fast track a deposit to buy your first home

Did you know you can withdraw some of your superannuation early, to buy your first home? It’s called the First Home Super Saver Scheme.

Our superannuation accounts attract 15% tax rate, as opposed to our regular income tax rate. This can help you save more money, faster.

As an example:

Your regular tax rate could be around 32% and for higher income earners, it is as much as 45%.

To show you this works in dollar terms:

If you salary sacrifice $100 to super, you will be saving $85 in your super fund (towards a deposit), that would otherwise be paid to you in after tax money as $66 in your hand.

That’s an extra $19 being saved for a home deposit, if saved in your super fund, instead of the bank. (I have assumed that the bank will pay you no interest on your money and you will not lose or gain any interest in your super fund to keep things simple)

You can choose to sacrifice a portion of your salary into your super, to build a deposit faster. When you have enough, you can withdraw it from your super account and use it towards a deposit for your first home.

Remember! This scheme is only available for your first home, and you need to check if you’re eligible before deciding to go ahead.

As always , it is best to seek independent financial advice. This advice is general in nature and should not be followed without first seeking independent financial advice.

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