Save
Students should think twice before tapping into their super
Former students might want to think carefully before they look to take advantage of the federal government’s biggest first home buyer incentive.
Students should think twice before tapping into their super
Former students might want to think carefully before they look to take advantage of the federal government’s biggest first home buyer incentive.
If you’re a first-time home buyer with an outstanding HECS debt, you might be setting yourself up for a tax surprise.
CPA Australia senior manager of tax policy Elinor Kasapidis told nestegg that First Home Super Saver Scheme (FHSSS) amounts are taxed at the time they’re withdrawn to pay for a property purchase.
“This means that the deposited amount plus earnings will be added to the first home buyer’s taxable income for that financial year,” she said.
While the current maximum FHSSS contribution is $30,000, the government has flagged an increase to $50,000 in the future.
Ms Kasapidis said that this amount would be enough to push many taxpayers into a higher marginal tax rate, which could, in turn, increase their HELP repayments.
“This could lead to an unpleasant surprise when the tax bill comes,” she said.
Ultimately, Ms Kasapidis said that the FHSSS shouldn’t be treated any differently to any other financial agreement.
She recommended that consumers always read and make sure they understand the fine print of government programs to avoid unexpected liabilities.
“A tax agent can help you understand the tax consequences of participating in the FHSSS, including potential tax liabilities when you withdraw your FHSSS amounts,” she said.
Research recently released by Homeloanexperts.com.au earlier this year asserted that a majority of millennials believe that the housing market needs more regulation in order to slow housing price growth and entice more first home buyers into the market.
A further 40 per cent of those surveyed said that these new measures should look to target first home buyers directly, akin to the government’s First Home Super Saver Scheme.
In the absence of affordability, Homeloanexperts.com.au chief executive Alan Hemmings said millennials are looking to find new ways into the market.
“Whether this involves them delaying their purchase, turning to family members to act as guarantor or even considering other options like rentvesting, millennials are being forced to consider other methods in their property journey,” he said.
RELATED ARTICLES
About the author
About the author
Tax saving
Navigating tax laws for capital gains in 2023
The landscape of Australian tax laws surrounding capital gains is ever-changing, with 2023 being no exception. Read more
Tax saving
What you need to know about the tax implications of crypto
One million Aussies are now invested in crypto, but many have not thought about how these investments will affect them at tax time. Read more
Tax saving
Welfare overhaul could give recipients a leg-up
Australia’s Centrelink recipients who’ve been doing it tough are in for a potentially easier time if the federal government pursues ambitious reforms that could provide sturdier safety nets. Read more
Tax saving
Advocates call for an end to tax cuts
Social services sector advocates have warned that further tax cuts may make solving Australia’s biggest challenges much harder. Read more
Tax saving
ATO and AUSTRAC may gain new phone-tapping powers
A proposed update to electronic surveillance legislation could see the ATO armed with new powers that would allow the agency to bug phones and intercept online communications. Read more
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. Read more
Tax saving
10 ways to reduce your tax bill
With the tax return deadline only one month away, these tips could help minimise your tax bill. Read more
Tax saving
Navigating tax laws for capital gains in 2023
The landscape of Australian tax laws surrounding capital gains is ever-changing, with 2023 being no exception. Read more
Tax saving
What you need to know about the tax implications of crypto
One million Aussies are now invested in crypto, but many have not thought about how these investments will affect them at tax time. Read more
Tax saving
Welfare overhaul could give recipients a leg-up
Australia’s Centrelink recipients who’ve been doing it tough are in for a potentially easier time if the federal government pursues ambitious reforms that could provide sturdier safety nets. Read more
Tax saving
Advocates call for an end to tax cuts
Social services sector advocates have warned that further tax cuts may make solving Australia’s biggest challenges much harder. Read more
Tax saving
ATO and AUSTRAC may gain new phone-tapping powers
A proposed update to electronic surveillance legislation could see the ATO armed with new powers that would allow the agency to bug phones and intercept online communications. Read more
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. Read more
Tax saving
10 ways to reduce your tax bill
With the tax return deadline only one month away, these tips could help minimise your tax bill. Read more
