KiwiSaver and First Home Super Saver (FHSS)
What you need to know before you bring your KiwiSaver across the ditch to use towards the FHSS scheme.
The good news is you can use your KiwiSaver for the FHSS scheme in Australia as long as you meet the criteria set out by the ATO. The ATO says ‘if you transfer an amount into an Australian super fund from a KiwiSaver scheme, the amount will be an eligible contribution (except for certain amounts)’. What is the ATO criteria, we hear you ask?
The KiwiSaver and FHSS criteria explained
There are certain amounts you cannot use towards the FHSS scheme.
First, if you are living and working in Australia and receiving super contributions, you will be subject to the same rules and regulations around FHSS as any Australian. More on that later.
Second, you cannot use amounts transferred from a KiwiSaver scheme that are Australian sourced amounts or returning New Zealand sourced amounts.
- Australian sourced amounts: These are contributions made to an Australian super fund whilst you have been working in Australia. If you have transferred these funds to a KiwiSaver account and then transfer your KiwiSaver back to Australia, the Australian sourced funds are not eligible for the FHSS scheme
- Returning New Zealand sourced amounts: These are funds that have been transferred to an Australian super fund and then transferred back to a KiwiSaver account. If you transfer the KiwiSaver funds to an Australian super fund a second time, these funds are not eligible for the FHSS
Australian superannuation contributions and the FHSS
In Australia, only voluntary contributions (before or after tax) made by you to your super fund can be used as part of the FHSS scheme.
The maximum voluntary contribution you can put towards the FHSS scheme is $15,000 in any one financial year. The total amount you are allowed to contribute is $30,000 per person*.
If you are buying a house with a partner, together you can withdraw up to $60,000 before tax in voluntary contributions.
*This limit is set to rise to $50,000 per person and $100,000 per couple under the Federal Government proposals on 1 July 2022.
Types of contributions that cannot be used towards FHSS
You cannot use contributions made:
- by your employer
- your spouse or anyone else on your behalf
The ATO makes it clear that if you include these amounts in your FHSS application, your request will be cancelled, and you will not be eligible to apply for the FHSS in the future.
Who is eligible for the FHSS?
You must be 18 years old or older for the FHSS scheme. Plus:
- you must never have owned property in Australia before – this includes an investment property, vacant land, commercial property, a lease of land in Australia, or a company title interest in land in Australia
- you can’t have accessed the FHSS scheme before
- you should be aware, there are different rules for those who have suffered from financial hardship
According to the ATO, there is no requirement for you to be an Australian citizen, Australian resident or an Australian resident for taxation purposes. If you hold a permanent resident visa, you can use the FHSS scheme as long as you meet the eligibility requirements.
Advantages of the FHSS
With bank interest saving rates currently so low, using your super to save for your first home deposit will help you achieve your goal faster.
By making extra contributions, you may pay less tax and could get a higher return on your money.
Downside of the FHSS
The ATO is responsible for setting and applying the rules for the FHSS scheme. They decide who is eligible for the scheme and who isn’t, so it’s important you know the rules.
First Super can only release money under the FHSS scheme when instructed by the ATO.
Saving money for a deposit can take time. If you change your mind or are unable to purchase your first home, the amount of money saved in your super cannot be withdrawn. It will stay in your super account as part of your retirement savings until you reach your perseveration age.
Benefits of transferring your KiwiSaver to Australia
If you are living and working in Australia, but still have a KiwiSaver account in New Zealand, you may want to transfer your money to an Australian fund that accepts KiwiSaver amounts – like First Super – to save on fees and tax.
First Super is one of only a few Australian super funds who accept KiwiSaver Transfers. First Super is an industry super fund, so our profits go back to our members and not shareholders. We have a history of delivering strong investment returns1, and once you become a member you’ll have access to our super education resources, including Financial Planners who offer account-based advice2 as part of your membership. Find out why you should join First Super.
For more information on FHSS see our FHSS factsheet.
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1Past returns are not a reliable indicator of future returns.
2First Super financial planners are authorised representatives of Industry Fund Services Limited (ABN 54 007 016 195, AFSL 232514).
This webpage on KiwiSaver and FHSS may contain general advice which has been prepared without taking into account your objectives, financial situation or needs. You should consider whether the advice is appropriate to your personal circumstances and consult the Product Disclosure Statement before making any investment decision.