You may help your children enter the property market and save on tax with the First Home Super Saver (FHSS) Scheme.
With the rising cost of living and housing, many parents are looking for ways to help their children enter the property market. The “Bank of Mum and Dad” has become an increasingly common solution, assisting with the initial deposit and possibly helping to avoid costly mortgage insurance.
But what if there was a way to support your children’s savings while also receiving a tax deduction? With careful planning ahead of time, the FHSS Scheme can be a valuable tool to achieve both goals.
The FHSS Scheme allows young adults to make voluntary personal contributions to their superannuation, which can later be accessed—up to a maximum of $50,000—to help purchase their first home. This strategy not only encourages disciplined saving but also offers tax benefits along the way.
For families who operate through a trust structure, annual tax planning often involves distributing income to children while they are at university or working part-time jobs. However, under ATO rules (section 100A), those distributions must be physically paid out. Instead of handing over cash, contributing to their superannuation through the FHSS Scheme may be a smarter alternative.
By directing these funds into their superannuation, parents can safeguard the savings, ensure the money is used for its intended purpose, and help their children accumulate a deposit for their first home. Additionally, these contributions may be tax-deductible, offering further tax advantages for the family group.
If you’d like to explore how the FHSS Scheme could work for your family’s financial strategy, please book a meeting with your dmca adviser to find out more.