The Association of Superannuation Funds of Australia (ASFA) has announced its support for proposed amendments to the regulation of First Home Saver Accounts (FHSAs) that will help first homebuyers pay off their mortgages.
Currently, a FHSA holder needs to keep their savings in the account for four financial years before they can use the savings to buy a home. Under the existing legislation, if the account holder buys a home prior to meeting the minimum four-year release conditions, the balance of their FHSA must be transferred to their superannuation so that it remains in a concessionally taxed environment.
Because the legislation has only been in place since 2008, no FHSA holders have been affected.
The amendment proposes that savings be allowed to be paid into an approved mortgage after the end of the qualifying period, rather than having to be paid to a superannuation account.
The changes would give first homebuyers a better chance to pay off more of their mortgage, earlier, according to ASFA.
The move also eliminates the additional cost-impact on fund members by removing the administrative burden on funds that have to process the small deposits, according to ASFA chief executive Pauline Vamos.
