If you’re among the many Brisbane first home buyers, you know how difficult it can be to buy a house these days. Not only is the market saturated with competition and pricey real estate, but saving up for the deposit is no small feat either.
But don’t let that deter you from achieving your first home buyer goals! With some savvy financial planning, like accessing super to buy a house, it doesn’t have to feel so daunting after all.
“Can I use my super to buy a house?” Yes, on certain conditions. Read on for our guide on using super to buy a house to live in. This guide takes some of the guesswork out of purchasing your first home without dipping into your savings too much.
Can I withdraw my super to buy a house?
Technically speaking, you can’t be using super to buy a house or property in Australia. But you can withdraw a portion of your voluntary contributions towards your super for this purpose.
Do note that for retirees over the age of 65, you can use your super as a lump sum to buy a house. This means you have reached ‘preservation age’.
How to use your super to buy a house
Below are ways to go about accessing your super to buy a house:
- First Home Super Saver (FHSS) Scheme
- Self Managed Super Fund (SMSF)
1. First Home Super Saver (FHSS) Scheme
Under the First Home Super Saver scheme, you may be able to access your superannuation savings to purchase a property in Australia.
How much super can I use to buy a house?
Borrowers can access up to $50,000 in total (across all years) from their super to use as deposit for their Brisbane home loans. If you’re a couple, that means you can access twice this amount or up to $100,000 of voluntary contributions combined.
Just be mindful of the superannuation contribution cap limits (up to $15,000 per financially year) when withdrawing super to buy a house.
When can I use my super to buy a house?
You must first make concessional contributions into your super fund, then apply for the super saver scheme with the Australian Taxation Office (ATO).
The ATO will assess your application and determine if you are eligible to withdraw the money from your super fund. Before deciding to use this option, it is wise to consult a financial advisor or accountant for advice.
Eligibility for the First Home Super Saver scheme:
You must:
- be 18 years of age and above
- have never owned a property in Australia before, including a property investment
- have not previously used the FHSS scheme
- intend to live in the property you are buying as soon as possible, or at least 6 months of the first 12 months you own it
2. Self Managed Super Fund (SMSF)
Under the SMSF, you can use super to buy a house or an investment property only if you do not live in it. There can be one to four members in the SMSF. And members can make collective decisions about how to use their super.
The ATO is quite strict in that they only allow the SMSF to be used as a means to provide retirement income for SMSF members. There are also a lot of regulations, legal responsibilities, and costs associated in setting up and running a SMSF, so be sure to do your due diligence in having this as your option.
When you purchase a property using your SMSF, it should be done on an “arm’s length” basis. This means that you cannot use this for personal purposes. It also can only be used for the benefit of the SMSF members.
So in reality – unless you are buying the property in the SMSF with a long term objective that once you retire it can then be used as a home (as you have met the preservation age) – this will probably not work for most people (general advice only here !)
To know more about the rules and regulations surrounding SMSFs and property, check the ATO’s website or speak with a mortgage broker.
Ready to be using super to buy a house? NBHL brokers can assist
All in all, using super to buy a house is great because it helps you not break the bank. However, it’s important that you consult with a financial advisor or broker before taking any steps. There are certain conditions and rules that must be met in order for this plan to work.
At North Brisbane Home Loans, our team of experienced mortgage brokers can assist you in determining whether using your super is the best finance option for you and provide guidance on how to go about doing so if it is.
Get in touch with us today by clicking the button below.
Patrick Cranshaw, a Certified Mortgage Professional for over 21 years, founded North Brisbane Home Loans in 2002. His career began with ANZ Bank in New Zealand, where he progressed over 16 years to a Business Banking role in Virginia. After moving to Brisbane in 2000, Patrick led the QLD market for a home loan agency, helped set up the REMAX Real Estate Finance division, and practiced as a broker.
