Under the scheme, first home buyers will be able to make extra contributions up to $15,000 a year into super to save for a home deposit, up to an overall limit of $30,000 per person. If you’re an employee, you can contribute extra from your pre-tax salary using salary sacrifice, provided your employer offers that option. (Note, however, that the superannuation guarantee contributions your employer makes for you will not count towards this amount — more on that in a moment.)
Alternatively, you can make a personal contribution from your after-tax salary, then claim a tax deduction for that amount. In either case, the extra contributions you make will be subject to a tax rate of 15%. So if your normal tax rate is higher, you come out ahead.
When you’re ready to buy your first home, you’ll be able to withdraw these extra contributions you have made on top of your normal super, plus an additional amount for your earnings on that money while it has been invested. Rather than calculating the actual return on your contributions while they are invested in your super, your fund will use a special “deemed earnings” amount, equal to a standard benchmark interest rate (the 90 day Bank Bill rate) plus a margin of 3% pa. As at 21 June 2017, that would give you a rate of return of 4.78% — higher than most term deposits, but lower than some super fund returns.
You will also need to pay tax on the amount you withdraw, but with the benefit a special 30% tax offset. For most taxpayers, that is likely to mean paying little or no tax on the amount withdrawn.