The PROPERTY DOCTORS, Sydney Australia Novak Properties
NOVAK PROPERTIES CREW and PROPERTY LEGENDS in the industry share their experiences and knowledge. Hacks and tips to make you a smarter property GURU :) Learn with exclusive content, advice, insider info and HOT real estate industry PRO SECRETS. For sale, for lease, residential, commercial, buying off the plan, finance, mortgages, interest rates, first home buyer, investments - all topics covered. The untold real estate info you've been waiting for.
The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1289 FIRST HOME BUYERS USING SUPERANNUATION TO SECURE YOUR FIRST PROPERTY
Can you really turbocharge your path to homeownership by leveraging your superannuation? Join us as we uncover the untapped potential of the First Home Super Saver Scheme (FHSSS) and how it can be a game-changer for first-time home buyers. We'll walk you through the benefits and intricacies of making voluntary super contributions, the substantial tax savings involved, and how a special side bucket within your super account can accelerate your savings. We also emphasize the crucial role of brokers in navigating the complexities of this scheme, ensuring you maximize its advantages and experience the full impact of compounded interest on your savings.
But that's not all! We delve into the broader potential of using superannuation for property investment, showing how even small, consistent contributions can significantly grow your super fund over time. Imagine turning an extra $10 a day into a potential $1.5 million by the time you retire. With expert insights and practical tips, we'll guide you on how to consult with your accountant to make informed, strategic decisions. Packed with valuable financial advice, this episode is a must-listen for anyone looking to maximize their future investments and take full advantage of government incentives designed to bolster your financial future.
Doesn't sound right. First home buyers using their superannuation to buy their first property. Stay tuned, we're going to tell you more about it.
Speaker 2:I'm the ringleader, so let's get up.
Speaker 1:Good morning.
Speaker 2:Morning Bill. How are you? Yeah, I'm good. I'm recovered from a big weekend.
Speaker 1:What happened to you, Bill? What happened to you on Saturday night?
Speaker 2:I was partying with the first-time buyer crew.
Speaker 1:It was the opposite. We went to buy-buy drinks with Kim and Billy went bye-bye.
Speaker 2:Yeah.
Speaker 1:Billy the mixologist.
Speaker 2:It was a really good night.
Speaker 1:This first-time buyer needs to have a party, yeah.
Speaker 2:Well, first home buyers using superannuation. It is a bit of a party, but it's amazing the transactions we're doing, particularly with our first home buyers, in price points between sort of $500,000 to $800,000. No one's using it. Maybe it's lack of awareness. No one knows about it. Yeah, I, I kid you not. I think I've only ever met two people that have used it and really was yeah, I haven't met one?
Speaker 2:yeah, well, I've met, definitely one. I think there was a second that used it on the back of their brokers um recommendation, but yeah it's, it's a funny one. So obviously, as a first-time buyer, you know there's different incentives on the table depending on what you're looking at, where you are, um, you know the best way to find those. You jump onto sort of the you know the government's website, but this one's, this one's there for the taking and no one those jump onto sort of the government's website, but this one's there for the taking and no one seems to grab a hold of it, which is really funny.
Speaker 1:So, guys and girls, if you've just tuned in, we're talking about first home buyers having the opportunity to use superannuation as part of their deposit when they're purchasing a property. Now where I'm finding that it actually comes undone, where it seriously becomes undone, is it's got a lead time. So when you start saving your deposit, you've got to start programming this activity, and what I often find is, by the time people actually want to do a deal, they're at the end of that of the line which is the of savings, and they're at the beginning of the line of purchasing. It's like well, why didn't someone tell me two years ago?
Speaker 2:yeah, yeah, and people are obviously focused on getting the deposit together. They're focused on trying to save hard. But I think the magic here is you can miss saving smart, and that's what superannuation will allow you to do. So. Can we just get into it? So let's tell the people what it is. Yeah, so, in like in New South Wales, first-time buyers can, you know, leverage their superannuation to purchase property through the first home super saver scheme, the FHSSS, that's what it's called. And here are the benefits. The tax savings is probably the biggest one, because you can make a voluntary superannuation contribution, super contribution, up to fifteen thousand dollars per year, um with a fifteen thousand dollar cap. That's, that's what it allows you to do um then.
Speaker 1:Then, when you're ready to buy, so for anyone who can't do, um, if we're not talking simple english for people, let me put it another way the they're allowing a side bucket within your super, yep, and for you to put, and for you to put money into that side bucket next to your super, within your super, but next to your super. If you do use that side bucket, that money does not have to be taxed when you earn it. So what happens is, instead of paying your regular tax on the money that you earn, you could just throw the money that you earn without paying tax into the side bucket. Then you can access that side bucket in your super and you can say, hey, I've got some more cash over here in this little side bucket pretty cool, but it allows you to save twice as quick yeah, well, depending on your tax rate.
Speaker 1:Depending on your tax rate, um, you're definitely saving, and the more the higher your tax rate, the um the that, the more incremental the savings are, because you're not paying tax on them. But you're limited. Like you said, billy, there's 15K a year that people can put in a side bucket in their super and they can do that for I believe so it's. How long is that? For two years, or is there a maximum that they can do that of believe so it's? How long is that for two years, or is there a maximum that they could do that all?
Speaker 2:yeah, oh, just maximum up to 50k. Up to 50k, it's pretty cool. So it's yeah, it's pretty cool. And then when you're ready, you can um. You know you can withdraw those um for your home deposit. Um, some people would argue that your savings will grow faster in your super because it's compounding rather than sitting in your regular savings account is it too complicated?
Speaker 1:why doesn't anyone know about it?
Speaker 2:well, there's a bit of paperwork involved. You do have to set this up. You can't can't just start whacking money in your super and then draw back on it. It does require a bit of stuff, yeah, and I think, rather than worrying about the headache of all of that, the same thing when you go to apply for your first homebuyer assistance scheme, which gives you the stamp duty rebateate under 800,000, talk to a broker. They can actually do all the hard work for you because this is a scheme.
Speaker 1:I don't know why every single buyer he's not using this little side bucket. It doesn't make sense. I don't know why every first time by it hasn't set this up. I don't know why every first time by isn't putting contributions towards it, and I don't know why. Why it's?
Speaker 2:I don't get it yeah, yeah, can I give you a fun fact if you start doing this thing properly, yeah, um yeah, this is a little bit, a little bit. This is a little bit off topic, but let me just show you how these things can make a big difference. For a 20-year-old today with an income of $60,000, who makes extra superannuation contributions of just $10 a day. They'll see their fund grow by an extra $1.5 to 6 million dollars by the age of 65. But you, bang on, you've got to set this stuff up at the start and just off topic as well we are.
Speaker 1:We've got the second biggest dollar pot of super in the world, the world yeah per capita. We're number one in the world for super contributions. We've got 10 trillion dollars of property, three and a half trillion in the suit in the stock markets and we've got three and a half trillion just in super the stock markets.
Speaker 2:And we've got three and a half trillion just in, super, our kids are going to be okay, billy, the next generation. But there you go.
Speaker 1:That, that is um 1990 1992 they started putting super in bill 1992. And guess what? They started super contributions at how?
Speaker 2:much.
Speaker 1:Guess. So now it's 11%. Guess what we started in 1992, paying towards super to create this huge pot of gold.
Speaker 2:today We've got 7%, 3%, wow Three.
Speaker 1:There you go. So it's actually if you think it's growing fast our super over the last 40 years. Mr Bob Paul brought it in. If you think it's growing fast, it's going to be a whopper in the next 30, 40 years, with 11% contributing and it's compounding. Yeah for saving.
Speaker 2:Yes but there you go. Good little short, there you go. Beautiful people, yeah, if you need, uh first time buyers.
Speaker 1:Yes, talk to your accountant. This is not financial advice, but it's we're giving you tips on what we're seeing people do and not do in the marketplace. Talk to your accountant. Like billy said, first buyers can can use their super to purchase property if they're set, if they set it up properly, the. It's one of the amazing incentives out there from the australian government for first-time buyers and, in my opinion, it's the most unutilized one definitely without a doubt, and ten dollars a day extra contribution will see an extra 1.5 mil in your super at age 65.
Speaker 1:and you can buy property in your super yeah, there you go.
Speaker 2:Hope that's helped someone have a great day. See you, legends.