One of the biggest hurdles for prospective first homebuyers is saving an adequate deposit to purchase their first home, especially when trying to avoid Lenders Mortgage Insurance or a loan guarantor arrangement. In a nutshell, saving an adequate deposit can often take considerable time and effort due to current housing prices, wage growth and living costs. For example, recent data has highlighted that the national average for the time taken to save a 20% deposit is 4.6 years (house) and 4.2 years (apartment)*.
In recognition of this, from 1 July 2018, the First Home Super Saver Scheme (FHSSS) will allow eligible prospective first homebuyers to withdraw an amount of voluntary superannuation contributions, and associated earnings, to assist with the purchase or construction of their first home. Given the concessional taxation arrangements that apply to the superannuation environment, the Government have stated that ‘the FHSSS will help accelerate savings by at least 30%’.
*Bankwest. (2017). Bankwest First Time Buyer Report.