Worried About Your Children Ever Being Able to Buy a Home? There are ways to help that can save tax and give you peace of mind.

With the residential property market having leapt hundreds of thousands of dollars over recent years, a common concern for clients is how their kids will ever be able to get enough savings together to make a start.

Many parents want to help but they are often not sure of the best way to do it.

For some, that means gifting cash. For others, it might mean acting as guarantor on a loan or letting their child live at home for longer to save. There is another strategy often overlooked – the First Home Super Saver Scheme (FHSSS).

Why Some Parents Are Using This Strategy

A common concern we hear from parents is:

“We want to help our child, but we also want to know the money is being used for a house deposit.”

That is where the FHSSS can be useful.

Rather than gifting $50,000 directly into your child’s bank account, parents may choose to help fund contributions into their child’s super over time.

Those funds generally cannot be accessed until retirement, death, significant disablement…. OR putting down a first home deposit.

That creates a level of accountability many parents appreciate.

What is the FHSSS?

The FHSSS allows eligible first home buyers (or in this case, parents on their behalf) to make voluntary contributions into super and later withdraw those funds to purchase their first home.

Key limits include:

Up to $15,000 per financial year
Up to $50,000 in total
Plus associated earnings

This can work well for parents who want to help fund their child’s deposit while ensuring the money is largely locked away for a first home purchase – not a European summer or a new car.

For full information, visit the following page:

ATO – First Home Super Saver Scheme

The Tax Benefit?

This is where the strategy can become even more attractive.

These contributions are generally taxed on their earnings at 15% inside super, which may be lower than their personal marginal tax rate if they are earning an income.

For someone earning a higher income, this can create meaningful tax savings while they save for a deposit. A key benefit is that your adult child can then potentially receive a tax deduction benefit for the contributions.

In a recent client example, Jane, a 30-year-old earning $120,000, had roughly $8,000 more available for a deposit by her parents contributing to her super fund, rather than providing her the same amount as cash.

Is it worth considering?

This strategy is not suitable for everyone.

There are rules around contribution caps, eligibility, tax treatment, and timing that need to be managed carefully.

But for parents who want to:

Help their children enter the property market
Access potential tax benefits
Ensure the money is being used for a home deposit

…it can be a practical alternative to simply transferring cash and hoping it gets used wisely.

We regularly help families assess whether strategies like this fit within their broader financial plan, both for parents providing support and children trying to enter the property market.