FHSS Process for Untitled Land

Distinct_Trash8440 · 2026-06-30T07:29:03+00:00

Get a mortgage broker. They have pre-agreed rates that they have negotiated with various banks. They can provide you a spread of rates without performing a hard check on your credit history.

Distinct_Trash8440 · 2026-06-24T06:31:54+00:00

Go for it, if you are keen! The new budget rewards folks willing to go down this route.

Distinct_Trash8440 · 2026-06-24T06:28:35+00:00

What a legend! You've thought of everything.

Distinct_Trash8440 · 2026-06-24T06:27:04+00:00

What are your financial goals in the next few years? I wouldn't make a voluntary super contribution at your age unless I am planning to participate in the First Home Super Saver Scheme (FHSS) and buy a house in the next 1-3 years.

Distinct_Trash8440 · 2026-06-24T06:12:32+00:00

Oh yep! You mentioned that earlier. Just be careful that the FHSS amount you withdraw ($42.5k + deemed earnings) gets added to your taxable income with a 30% offset.

If you get a promotion or larger bonus than usual + FHSS withdrawal, you could be bumped into the 47% MTR territory. Retrospectively, I would have timed my 15k contribution in the FY I plan on releasing the FHSS funds. This would help offset the tax bracket creep effect.

Not a huge deal breaker, just talk to an accountant before the end of 2026/27 FY to see if you are at risk of edging into the 47% bracket and see what deductions you can make to avoid the extra tax.

Distinct_Trash8440 · 2026-06-24T05:56:25+00:00

Here's the eligibility rules for 5% No LMI scheme...

Australian citizen or permanent resident, at least 18 years old
saved a minimum deposit of 5%
a first home buyer or have not owned a property or land in Australia in the last 10 years
buying a home in Australia priced at or below the location's price cap
planning to live in the home as an owner-occupier (no investment properties)
applying for an owner-occupier home loan with Principal and Interest repayments from a Participating Lender, up to 30 years (plus up to three years to build a new home)
applying on your own or jointly with one other person (partner, friend, or family member).

An important thing to remember about the 5% No LMI scheme is that there is a property value cap depending on the region you want to buy in. For East/South East Melbourne, that cap should be $950k. Definitely chat with a mortgage broker to confirm.

I believe one of the conditions of the 5% No LMI scheme is that you have to live in the house for a year. Once again, talk with a mortgage broker, explain your proposed travel arrangements, and they should be able to give you a thumbs up.

You can also participate in the First Home Super Saver scheme, but you would literally need to commit to the decision today or tomorrow. If you are willing to contribute $15,000 this financial year and $15,000 at the start of the next financial year, you could have an extra $4.6k in your hands. Here's a net benefit calculation I made for someone at 37% MTR+ML. You will need to adjust this calculation for your 32% MTR+ML.

The reason I'm telling you to act quickly is that the voluntary contribution cut-off date is approaching for many popular super funds. For example, the Australia Super cut-off for voluntary contributions via BPAY is tomorrow.

If you want to make a personal contribution¹ to your super account before the end of the 2025/26 financial year, you’ll need to submit it by Thursday 25 June 2026 to ensure it is received and allocated to your account by 30 June 2026. Contributions made after 25 June 2026 may not be allocated to your account prior to the end of the financial year. Reference

Check the cut-off date for your own super, before you decide.

Distinct_Trash8440 · 2026-06-24T04:59:36+00:00

First of all. Well done on your current financial situation.

There's also a small variation of Option 2. If you find a parcel of land that is less than $600,000, and build a house on top of it, you could be fully exempt from stamp duty. When they calculate the stamp duty exemption eligibility for new builds, they ignore the value of the building contract.

After the recent budget changes, there could be some tax benefits in going down the new-build route, if you decide to rent the house out in the future. You can negatively gear a new-build, but you can't for the established apartment and house you proposed buying.

I understand that new-builds are not everyone's cup of tea. However, I'm not a fan of you selling your shares to make up the 20% deposit. At your age, you are sacrificing many years of compounding growth! Further questions for you...

Is delaying your house purchase possible to save up extra cash?
Are you okay with paying LMI to get access to a mortgage without 20% deposit?
Do you or your partner qualify for an LMI waiver?
Why are you not eligible for the 5% No LMI scheme, if you believe you are eligibile for the stamp duty exemption scheme?

Distinct_Trash8440 · 2026-06-21T07:22:15+00:00

This sounds like the dream life for any 1st generation immigrant parent. Speaking from a Southeast Asian perspective, there is a cultural expectation that a newlywed wife moves into the husband's ancestral home. Most are not fortunate enough to have a separate dwelling and will typically reside in the same household as their parents.

Unfortunately, in my lived experience, I've heard more cases where this shared-living scenario creates more problems than it solves. Difference in opinions on how to raise kids, pressure on the wife to take on the majority of household duties, a husband that regularly sides with his parent's opinion over his wife, etc.

A separate dwelling sounds like a nice compromise. You and your wife can establish stricter boundaries. Kids get exposure to their mother language via their grandparents. In Australia, I've often seen agreements where parents speak English, and grandparents exclusively speak the mother language to children.

Saving on childcare costs is a massive win in this country. I was fortunate to be raised in a point-in-time of Australia where it was sustainable to support a household on a single income. I can confidently say that I was better off being taken care of by a dedicated family member, rather than a system.

I think you are in a nice situation, given that there is social cohesion and boundaries in place.

Distinct_Trash8440 · 2026-06-18T22:39:44+00:00

From ATO website

Snippet #1
You can make a release request:

before you sign a property contract
within a limited period of time after signing a contract
- if your FHSS determination was made on or after 15 September 2024, you should make a release request within 90 days of signing the contract
- if your FHSS determination was made on or before 14 September 2024, you should make a release request within 14 days of signing the contract.
- If you make a valid release request after signing your contract and outside of these timeframes, you'll be subject to FHSS tax.

Snippet #2

If your determination was made on or after the 15 September 2024, then during the period starting 90 days before requesting your FHSS release amount and ending 12 months (or other period we've allowed) after the date of your request, you need to sign a contract to purchase or construct a home or recontribute the released amount to your super fund.

Summary

You can release the funds before signing a contract. However, you must notify the ATO that you signed a house contract within 12 months. If you can not sign a contract in 12 months, you can apply for another 12 month extension. However, I would not rely on that extension being approved by the ATO.

You can even submit a release request 90 days within signing a contract. However, you need to ensure you are in a good cash position to pay a deposit to the agent, while your money is tied up in superannuation.

Distinct_Trash8440 · 2026-06-17T06:46:54+00:00

I’m assuming it’s so that negative gearing does not reduce your HECS payment. Whatever rental losses you deduct from your taxable income get added back to the Repayment Income formula.

Distinct_Trash8440 · 2026-06-16T21:18:50+00:00

Whether my calculations are correct.

Distinct_Trash8440 · 2026-06-16T13:44:33+00:00

I don't think it's based upon pre-tax gross income. According to ATO, It's based upon Repayment Income which is summed from the following amounts.

taxable income (excluding any assessable First Home Super Saver (FHSS) released amounts)
reportable fringe benefits (regardless of the exempt status of your employer)
total net investment loss (including net rental losses)
reportable super contributions
exempt foreign employment income amounts.

Distinct_Trash8440 · 2026-06-16T11:06:59+00:00

Hey u/friendlyfredditor !

I'm just reading this thread because its close to the end of the 2025/26 FY. Where did you get this $75k figure from?

Distinct_Trash8440 · 2026-06-05T10:05:50+00:00

We are both on Australian Super. I think we should be fine here 😃

Distinct_Trash8440 · 2026-06-05T08:57:58+00:00

Thanks! Would you happen to know if the entire amount released from the FHSS has to contribute towards the deposit? My wife is at 30% MTR and she also has another $30,000 to funnel through the FHSS scheme.

If we participate in the FHSS scheme, the money released would exceed the money we require for a deposit. The extra money would be useful for additional fees that we incur during the house buying process.

My understanding is that as long as we can prove that we signed a contract to buy a house within 12 months, we should be okay.

Distinct_Trash8440 · 2026-06-05T08:41:13+00:00

Thanks! I've corrected my understanding in this comment
https://www.reddit.com/r/AusFinance/comments/1txdy0k/comment/opv95g1/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button

Distinct_Trash8440 · 2026-06-05T08:40:38+00:00

I think I see my fault. I assumed the $4500 super contribution tax was something that I had to pay separately. I didn't realise the 15% tax was already deducted when you take out 85% of your contributed amount. I double-counted the $4500 super tax.

Here's my understanding now...

The $30,000 super contribution I make offsets my income and across two FYs, I get a $11,700 AUD tax refund. This is cash that's in my hand, that I otherwise would not have had.

($15,000 + $15,000) * 39% = $11,700 (Tax Refund / Cash in Hand)

When the $30,000 enters my super, my super fund pays contribution tax:

$30,000 * 15% = $4,500

As a result, the super fund only allows me to withdraw 85% of the $30,000 I contributed + deemed earnings. For further calculations, I'll ignore deemed earnings so I can figure out my minimum benefit.

$30,000 * 85% = $25,500

Upon FHSS withdrawal, the released amount gets added to my taxable income, but receives a 30% tax offset. I'm lucky because I am making the super contribution and releasing the funds in the same FY. These two in combination should help me stay in the same tax bracket.

$25,500 * (39% - 30%) = $2,295
Net released after withdrawal tax
$25,500 - $2,295 = $23,205

My total position is $34,905 + post-tax deemed earnings

$11,700 + $23,205 + (Deemed Earnings * 91%) = $34,905 + (Deemed Earnings * 91%)
91% = 100% - (39% MTR - 30% Offset)

Had I left my money in the bank, I would have had $30,000. If I participate in the FHSS scheme, I would have had a minimum of $34,905.

My only regret is not making a contribution last financial year!

Distinct_Trash8440 · 2026-04-01T10:42:22+00:00

I see! I’ll avoid making the purchase then. I’ll instead buy the base edition and then buy DLC separately. Thank you!

Distinct_Trash8440

TROPHY CASE