Do you have an eye on what could be your first home and are you justifiably excited about the prospects? You may have been living in rented accommodation for some time and feel that it's high time that you joined the ranks of the homeowner, but you're still unsure how you're going to finance this. Did you know that you may be able to use some of your superannuation funds due to recent changes in government legislation? If eligible, this could help you get across the line so that you're able to come up with the appropriate deposit and qualify for a mortgage. What do you need to know about this, to move forward?
In recent years, the government has passed legislation that will enable first-time home buyers to withdraw voluntary contributions that they have made into their superannuation fund. As you may know, you are allowed to contribute up to $15,000 per financial year for a maximum of two years, and this money is taken out at source by your employer. Then, when it's time for you to put down some money on a first home purchase you are allowed to use that maximum contribution, together with an amount that is related to "deemed earnings."
Easier Access to Funds
When you do so, you are using funds that have already benefited from the significant tax concessions associated with superannuation. Many people think that it's easier to save through super anyway, especially as you don't "see" the money before it is taken out of your pay.
One thing to bear in mind is that you will still need to get approval from the ATO to use the money for your first-time purchase. While there will be some duty payable that's related to the marginal rate, you'll be able to claim a tax offset against this.
How to Get Guidance
Remember, this is not the only way to finance a deposit for your home, and you should talk with mortgage providers to see what options they can suggest in your case. Furthermore, always engage a conveyancing agent at the earliest stage of the process, so that they can give you some direction as well. Good conveyancing solicitors will be able to help you deal with any paperwork as you access your superannuation benefit and will also line up all the other documentation to help you through the challenging process for first-time buyers.