Buying a first home is a major life milestone. Saving enough for a deposit can feel like a huge, and at times impossible, achievement. Before reaching the point of navigating open homes, mortgages, settlement and stamp duty, laying down a strategy to save a deposit is a crucial first step.
The topic of housing affordability and first home buyers entering the market is never far from the media spotlight or political discussion. A proposed solution to assist first home buyers is the Federal Government’s First Home Super Saver Scheme, introduced as part of the 2017-2018 Federal Budget.
The Scheme will allow prospective buyers to make up to $30,000 in voluntary superannuation contributions over two years and then withdraw these funds, plus earnings made, to put towards a deposit on their first home. A couple can each take advantage of the scheme, although any contributions made under this Scheme will still need to fall within existing superannuation contribution caps.
The Scheme is still yet to be formally legislated by parliament, but if passed, it has the potential to revolutionise first home purchases and greatly assist in saving a deposit. First home buyers could technically start making voluntary superannuation contributions from 1 July this year, but caution is strongly advised until the measure is legislated and ability to withdraw funds is guaranteed.
Nonetheless, people looking to purchase their first home in the next one to two years can still start on the path to home ownership by saving and budgeting in preparation.
Whilst stressful and sometimes challenging, the purchase of a first home can be one of the most exciting achievements in life. Taking the time to set a budget and establish good savings habits early on can lead to a stress-free life as a property owner. Take a look at our tips for budgeting for some suggestions on how to save a home deposit or use our budgeting calculator to help put a budget together.
The proposed Scheme will go before parliament later this year and we'll be watching closely.
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