Purchasing your first property in the Territory

To buy a property you need a deposit. That’s why the Australian Government’s FHSS scheme was created. FHSS gives you the opportunity to withdraw specific parts of your super, to pay for your deposit.

You’re only able to use super that you have personally contributed (i.e. not from your employer).

A common method is to transfer money from your salary or savings to your super (and potentially pay less tax on it), and then when the time is right, withdraw from it to pay your home deposit.

FHSS works with the Northern Territory’s government programs to help get eligible home buyers onto the property ladder.

Saving through the FHSS can have advantages immediately, because of the tax advantages of making voluntary contributions to your super.

You can do this by salary sacrificing, or by contributing from your earnings and claiming a tax deduction. In both cases, those contributions are taxed at the reduced rate of 15% instead of the higher income tax rate.

So, not only do you pay less tax when you voluntarily contribute, but you’re also adding to the super you could withdraw via the FHSS.

Note, there are limits on how much you can contribute to your super each year.

1. Check you’re eligible for the FHSS – are you 18 years old or over and a first home buyer? There’s no Australian citizenship or residency requirement to apply.
2. Check that your super fund allows you to withdraw under the FHSS (Spaceship Super does!)
3. Start out by contributing to your own super in any of the following ways:
   1. Contribute after-tax money to your super and then a claim tax deduction in your tax return.
   2. Salary sacrifice, by asking your employer’s payroll department to send some of your income directly to your super account instead of to you.
   3. Contribute after-tax money to your super account, without claiming a tax deduction.
   • Options a and b count towards your ‘concessional contributions’ annual cap of $27,500 (including your employer contributions) and come with tax savings.
   • Option c counts towards your ‘non-concessional’ annual cap of $110,000.
   • There’s a $15,000 cap on how much you can save via the FHSS each year. 
4. Think financial years. Your annual limits reset on 1 July every year. 
5. When it comes time to start looking for a home, you apply for a FHSS Determination and a release from the ATO.
   Make sure you get the determination before you sign a contract, so you know how much you’re able to withdraw as a deposit.
   Much of the information will be pre-filled, but it will be handy to have a record of your contributions on hand just to check.
6. Buy your property!
   Once you sign a contract, submit an FHSS Release Request.
   The ATO requires this within 14 days of signing the contract, but it’s best to do it straight away.
   The amount you withdraw via FHSS will be paid into your bank account. In most cases it will take between 15 to 25 business days.
7. Alternatively, you can submit the Release Request before signing a contract.
   If you do this, you have up to 24 months (an initial 12 months and an automatic 12-month extension if you need it) to sign a contract on your first home.
   If more than one person is buying the home, each person can use their own FHSS as long as they meet the criteria.
   Even if one person is not eligible, other eligible buyers can still apply for the FHSS.

First Home Guarantee is a Federal Government program designed to reduce the upfront cost of buying a first home. Eligible Australians can purchase their first home with a deposit of just 5%, without needing lenders' mortgage insurance.

The program is known as FHBG to avoid confusion with other programs.

The First Home Guarantee (FHBG) is a valuable initiative for first home buyers, and it can be useful in helping you to save for a deposit and get a mortgage.

It enables first-time buyers to purchase a home with a deposit of as little as 5%, rather than the usual 20% required by most lenders to dodge costly mortgage insurance.

Generally, when applying for the First Home Guarantee (also known as First Home Loan Deposit Scheme or FHLDS) in the NT,  you’ll need to make sure you meet the following criteria:

• You’re an Australian citizen 18 years of age or older.
• You earn less than $125,000 per year if you’re an individual or $200,000 per year if you’re a couple
• Your plan is to live in the property you buy
• It will be the first property you purchase.

Only residential dwellings are eligible, for example:

• A new or existing house, unit townhouse or apartment
• Vacant land when you have contracted a builder for a new home
• Off-the-plan contracts for an apartment or townhouse
• A builder’s house and land package.

In the Northern Territory in 2023, your property cannot be valued at more than $600,000 to be eligible.

Check out the First Home Guarantee website for full eligibility details.

Join Spaceship Super – and track your FHSS contributions with the Spaceship app.