Concessional tax treatment
Before-tax contributions are generally taxed at 15%
First home buyers may be able to use their super as a tax-effective way to save for part of their home deposit. The concessional tax treatment of super may help first home buyers save faster.
26-year-old Carly is currently working whilst living at home with her parents and earns $65,000 a year, plus super. Carly estimates she can set aside $6,000 per year and decides to arrange a before-tax salary sacrifice agreement with her employer. After five years of salary sacrificing, Carly has $26,940* available in her super fund for a deposit under the First Home Super Saver scheme. By putting extra into her super, Carly saves an additional $7,351 to put towards her deposit.
How Carly saved an extra $7,351 with the FHSS scheme
|Carly contributed $6,000 per year to her super under the FHSS||After 5 years of contributing via FHSS, she saves $26,940||By saving via the FHSS, she saves an additional $7,351 to put towards her deposit|
|Extra contribution (using salary sacrifice)||Savings account|
*Case study assumptions:
When you’re ready, it’s easy to start. In just a few steps, you can set up your extra contributions which is an important part of using the scheme. There are limits on the amount you can contribute (see limits here), and you should consider whether making extra contributions is right for you.