First Home Super Saver Tax Act 2017

Overview

The First Home Super Saver Tax Act 2017 was enacted to address the growing concern over housing affordability in Australia by imposing a tax on certain superannuation withdrawals for the purpose of purchasing a first home. The Act was passed by the Parliament of Australia and received assent on 13 December 2017. The policy objective of this legislation was to reduce the pressure on housing affordability by discouraging the use of superannuation funds for home purchases, thereby attempting to stabilise the housing market. The tax is imposed on the amount of superannuation withdrawn by a person for the purpose of purchasing a first home, and the rate of this tax is set at 20% of the assessable amount released under the First Home Super Saver scheme as defined in the Income Tax Assessment Act 1997. The Act came into effect on 1 July 2018, in alignment with the commencement of the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Act 2017.

Scope and Application

The First Home Super Saver Tax Act 2017 imposes a tax on individuals who access their superannuation savings to purchase their first home. This Act applies to individuals who withdraw superannuation funds for the purpose of purchasing a property intended as their primary residence. The tax is levied on the amount withdrawn from the superannuation account, which is referred to as the "assessable FHSS released amount" as defined in the Income Tax Assessment Act 1997. The Act came into effect on 1 July 2018, in conjunction with the commencement of Schedule 1 to the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Act 2017. The tax is calculated at a rate of 20% of the withdrawn amount, and it is payable under section 313-60 of the Income Tax Assessment Act 1997. The Act applies nationwide across Australia, covering all states and territories, and there are no stated exclusions, exemptions, or thresholds within the Act itself. However, the application of the tax may be extended or restricted through subordinate instruments.

Key Provisions

The First Home Super Saver Tax Act 2017 (section 1) imposes a tax on the release of superannuation funds for first home buyers. According to section 3, this tax is imposed on the first home super saver tax payable by a person under section 313-60 of the Income Tax Assessment Act 1997. Section 4 specifies that the amount of the first home super saver tax is 20% of the person’s assessable First Home Super Saver Scheme (FHSS) released amount, as defined in the Income Tax Assessment Act 1997. The Act imposes specific obligations on individuals who are subject to the first home super saver tax. These individuals must ensure that they comply with the provisions of section 3, which mandates the payment of the tax on their assessable FHSS released amount. Additionally, they must ensure that the tax is calculated correctly according to the 20% rate stipulated in section 4. Failure to comply with the requirements of this Act may result in legal consequences. Although the Act does not explicitly detail offences or penalties, the underlying provisions of the Income Tax Assessment Act 1997, which this Act references, impose penalties for non-compliance. These can include fines and interest on unpaid tax amounts. The exact penalties would be determined according to the provisions of the Income Tax Assessment Act 1997, which may include pecuniary penalties for serious non-compliance or fraudulent behaviour.