Simplifying the Super Saver Scheme

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From the 1st of July, first home buyers can instruct their employer to deposit money from their pre-tax income into their Super account. But what does this really mean for young Queenslanders wanting to purchase their first home?

Pro 1: Accessing the property market sooner. Doing this instead of saving money into a bank account means being taxed at just 15 per cent as opposed to the usual marginal tax rates, thus meaning first home buyers are able to enter the market earlier.

Pro 2: Couples can individually do the Super Saver Scheme. Young couples saving to buy a house together will be able to save $60,000 under the Super Saver Scheme. With a median house price of approximately $338,000, $60,000 is a good start for a deposit.

Con 1: Your savings can only be used for a property. Once your money is invested in the Super Fund, it can only be used for a property. If you can’t save the rest for a deposit or change your mind, it will be locked in the fund until you reach retirement.

Con 2: Your savings are capped at $30,000. You can also only contribute $15,000 per year.

Con 3: Penny pinching retirement funds. The Association of Superannuation Funds of Australia predicts that this scheme may lead many young people being unable to fund their ideal lifestyle post working life, having taken funds from their retirement nestegg.