First home salary sacrifice sums unclear

The amount of money that can be allocated to the First Home Super Savers Scheme requires clarification to allow proper compliance with and execution of the initiative, an SMSF strategy specialist has said.

“Individuals can make voluntary contributions of up to $15,000 per year, so I’m expecting it means the gross amount of the contribution can go toward the first home deposit. We won’t know until we see the legislation and this is absolutely crucial to know how to make an allowance for this activity in an SMSF trust deed,” @GrantSMSF founder Grant Abbott said.

“Whether it’s the $15,000 or the $15,000 less the 15 per cent tax, much the same as we see with splitting of concessional superannuation contributions where the amount there is 85 per cent, either way it shouldn’t be an issue, but we do need to know in order to get the execution right,” Abbott noted.

He pointed out more detail regarding the nature of the contributions was also needed.

“I’m assuming there it’s got to be a contribution made by the member directly, not for example a child contribution where a parent or a grandparent can make a contribution,” he said.

“So remember the contribution has to come from the employee, not the employer.”

From this perspective, he argued individuals have to ensure other non-superannuation provisions are made to accommodate participation in the scheme.

“Part of the success around the execution is the need to have an employment agreement that allows a salary sacrifice arrangement and whereby the individual must be able to determine what the salary sacrifice component is at the start of the year,” he said.

He noted the total allowed to be salary sacrificed for the First Home Super Savers Scheme is $30,000 and $60,000 for a couple, but questioned how it may apply in other situations.

“I query what happens when four people get together in an SMSF to all buy their first home,” he said.

It is assumed the properties under the scheme will have to be owner-occupied or be the person’s principal place of residence.

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