The new budget and the tax benefits for First Home Buyers.
Ray Ong went back to 98five to talk about the new budget and the tax benefits for First Home Buyers. Read on to learn more!
There’s been a fair bit of information come out with the budget and with the new financial year now underway, let’s talk about how First Home Owners.
In the new budget, First Home Owners. will get tax breaks on savings to put towards a house deposit. So, what it means is it will allow first timers to put voluntary deposits into their super which they can then withdraw later for a house deposit.
Is this a complicated process for First Home Owners?
I think at the heart of it, it’s reasonably simple but there are some things to keep in mind like the limits on what you can put into your super, but in general I think the scheme is worthwhile taking part of because of the tax break, you’re getting more for your money.
There’s been a lot of different schemes to help First Home Buyers over the last few years, what’s different about this one, what are the benefits?
With this scheme, it’s more straight forward but in terms of getting it done.
With this one, what are the benefits of this one with super?
Basically, you’re saving more through getting some tax breaks. So the government is giving you a bit of a leg up by enabling you to save for your house deposit. It all comes down to how your salary is normally taxed. With this scheme, instead of paying your normal salaries tax you pay the super contributions tax which is 15% which compared to about 19% (if you’re earning over $37,000) or 30% if you’re earning over $80,000.
So, the money goes into your super fund. Is there a time restriction to when you can withdraw your savings for your house deposit?
From my reading of the paper, you can take the funds out from July 1st 2018 so you’re not locked in for five years for example. But there are limits on what you can put in, the maximum you can put in is $15,000 per person per year, capped at $30,000 per person over a lifetime.
How do people take part in this incentive?
Just go to your employer at the start of the financial year and ask them to help you. If your employee can’t help you with this for whatever reason you can deposit the money yourself into your super and then claim a tax reduction come the end of next financial year.
What risks could there be?
When you put the money into super, your money will be invested according to how your super is invested. So you’ve just got to be mindful of that risk that comes with investing.
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