As mentioned above, if you have met a superannuation condition of release and able to access some or all of your retirement savings from super, then you can withdraw what you need to cover the cost of a house deposit. However, the amount must first be removed from your super account into your personal bank account, then be used for a house deposit.
Read more, below, about the First Home Super Saver scheme. The investment menu is generally made up of managed funds, multi-mix investment options, and maybe even access to ASX-listed shares. These types of superannuation accounts do not provide sufficient scope for you to use your super to buy an investment property. You can, however, use your super to buy an investment property if you have a self managed superannuation fund SMSF or were to rollover your existing super savings to a SMSF.
A SMSF is a structure whereby you are not only a member of the super fund, but also the trustee of the super fund. It is important to note that running a SMSF comes with a high degree of responsibility , as you are legally required to to meet all legislative, regulatory, accounting and administrative obligations associated with being a trustee of a SMSF.
They costs associated with a SMSF can also be much higher than an ordinary superannuation account. Again, you are unable to purchase a home within your super to live in and you can only use your superannuation to buy your first home if you have met a superannuation condition of release — by withdrawing your savings from super and purchasing your first home in your own name.
The First Home Super Saver Scheme FHSS , designed to improve housing affordability, is a way that you can save money for your first home within your superannuation account. This is done by making voluntary concessional pre-tax or non-concessional post-tax contributions into super to save for your first home.
Some examples of voluntary super contributions include salary sacrifice contributions, personal concessional contributions e. You can then apply to access these voluntary contributions, plus an earnings, to help you purchase your first home. The FHSS release can only be applied for once. This scheme is only available for first home buyers. Not investors or second-time buyers. But, if you fall into the latter category, keep reading from Chapter 2 onwards.
Hold on! If you have lost ownership over your property due to a natural disaster, divorce or bankruptcy, then you will be able to complete a hardship application form. So in turn, you may be eligible for the FHSS scheme too. It depends on the timeframe. The difference becomes greater in savings over two years for high-income earners. In the table below, you can see the difference between incomes. However, smaller long term contributions for low-income earners prove to generate better savings and a higher additional savings amount.
You will need to apply for and receive, an FHSSS determination before applying for the funds to be released. After you have an FHSSS determination signed, with the signed contract, you cannot request another one.
From there, you need to request your finds to be released. Not every Government scheme is perfect. Fortunately, there are other options for you to get into the property market. Your parents, a close friend or a family member can guarantor your property. The eligibility requirements to become a guarantor are:. When a guarantor takes on a property with the buyer, they are legally required to pay back the loan if the buyer cannot fulfil repayments. They will need to pay any extra fees or charges too.
The good news is, the guarantor can take on just some or part of the loan. So if this happens, only a portion of the loan will fall back onto them.
See the full details of a guarantor loan here. If you are in a stable financial position and are ready to get into the property market, having a guarantor can be a great way to fast track this process. Sometimes, all you need to do is continue saving and wait a little longer.
The more you save, the easier it will be financially to pay your mortgage and still afford to live. A great way to maximise your savings is by starting with your expenses. Do an audit of unnecessary spending. Are you spending money on UberEats or AfterPay each week? Time to cut those expenses. Now replace that money by putting it into savings. These small changes will help you speed up your savings process. Figure out a contract with ownership over the property, and have an exit strategy should either one of you want to sell their half of the property.
You may feel like these steps are unnecessary. Buying with your partner or family member can be a great way to combine your savings and make the process much more affordable. This section is specifically for property investors. So what is a self-managed super fund? The concept is, through a self-managed super fund, you can use the money to buy an investment property. You can buy the property through your SMSF, and the fund can have one to four members.
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