The First Home Super Saver Scheme (FHSS) enables individuals over 18 who have never owned a home to apply to release voluntary contributions from their super fund to buy their first home, with individuals able to withdraw these voluntary contributions along with the deemed earnings from 1 July 2018.
With Treasury Laws Amendment (2019 Measures No. 1) Bill 2019 passing earlier this year, three key changes to the FHSS scheme will come into effect from 1 July 2019.
A significant change will mean that individuals will no longer have to wait until the first FHSS amount to be released before they can sign a contract to purchase or construct their home.
Instead, an individual can sign a contract either from the date they make a valid request to release their FHSS amounts or up to 14 days before they make a valid request to release their FHSS amounts.
The change will ameliorate concerns from the industry regarding the 15 to 25 days the ATO takes to release the amounts.
“Under the old arrangement, you had to have all those ducks lined up and have the money in your hot little hand before you could turn around and buy a place,” Fitzpatricks Private Wealth head of technical services Colin Lewis told Accountants Daily.
“That period could have been 25 days, and if you are looking a property you are keen on this weekend, that may well long be gone by the time you actually got the money out of the system to go and buy it, and that was pretty tragic.”
He added: “Under the old rules, what you would be advising people to do would be to not really look around until you actually got the money and you had 12 months to do something about it.
“The changes are certainly a vast improvement on the process. It gives you time and is a far more effective arrangement than having to wait for the money.”
Another change will mean individuals will have 12 months from the date they make a valid release request to either sign a contract or recontribute the FHSS amount, instead of 12 months from the date the first FHSS is released to them.
Lastly, a change will see the FHSS scheme to only be applicable to first home purchases in Australia only, whereas previously it could have been applied for a first home in any location.
The changes will apply retrospectively to valid FHSS release requests and contracts entered into on or after 1 July 2018.
The not-to-be-missed Accountants Daily Strategy Day will travel through Melbourne and Sydney in August to equip accounting professionals with the latest industry updates and tips for modern practice management as well as the latest cutting-edge technology, processes, strategies and trends shaping the future of accounting. Visit the website for more information: www.accountantsdaily.com.au/strategy-day
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.