Federal Parliament has passed an important change to the First Home Super Saver Scheme to further help first home buyers.
The new legislation means individuals can enter a contract to buy or build their first home at an earlier time and still have access to the First Home Super Saver Scheme.
Previously first home buyers had to wait for amounts to be released from their super before entering a contract. Given the rapid pace of the housing market, delays meant buying opportunities were being missed.
Now buyers can enter a contract to purchase or construct their first home as long as they have applied for and received a First Home Super Saver determination. Buyers must also apply for their super release within 14 days of entering the contract.
What will come as a relief to some first home buyers is the new law is being retrospectively applied from July 1, 2018.
This means “individuals who have a determination, made a valid request for release from the Commissioner and enter into a contract to purchase or construct their home on or after 1 July 2018 will satisfy the requirements of the First Home Super Saver Scheme”.
Other conditions of the scheme include:
- The price for the purchase or construction of the premises is at least equal to the amount requested for release
- The individual has occupied the premises, or intends to occupy it as soon as practicable; and
- The individual intends to occupy the premises for at least six of the first 12 months that it is practicable to occupy the premises
A joint statement from Treasurer Josh Frydenberg and Assistant Treasurer Stuart Robert said the package of legislation will “further improve outcomes for superannuation members”.
Aside from the First Home Super Saver Scheme, the legislation also implements two recommendations of the banking royal commission.
It bans superannuation funds from inducing employers, extends civil penalties to super fund trustees – in addition to civil and criminal penalties to directors – for breach of their best interests duty, boosts APRA’s powers to take preventative or corrective action where they find that a super fund is not acting in the best interests of members, and strengthens APRA’s power over the authorisation process for default MySuper products.