First home buyers played a key role in the Federal Government's 2017-18 Budget.
Under its housing affordability package, the Federal Government announced that first home buyers will be allowed to salary sacrifice a portion of their pre-tax income into their superannuation to save a property deposit.
From 1 July 2017, first home buyers will be able to contribute up to $15,000 in one year, and a maximum $30,000 in total to their super accounts.
Salary sacrificed contributions will be taxed at the regular superannuation rate of 15% - which is likely to be below a first home buyer's marginal tax rate.
In addition, first home buyers will receive a tax discount when it comes time to withdraw the saved funds in order to buy a home.
As part of the federal Government's plan, when it comes to withdraw the funds, the monetary withdrawal will be taxed at the first time buyer's marginal tax rates less a 30% offset.
Those who are self-employed or whose employer does not salary sacrifice can claim a tax deduction on personal contributions.
Voluntary contributions must be made within current superannuation caps.
As such, the total contributions a person can make from both compulsory employer contributions and voluntary contributions cannot exceed $25,000 this financial year.
For anyone looking to buy their first home with a significant other, two people are allowed to salary sacrifice into the same superannuation account and withdraw the funds when needed.
So how will the First Home Buyer Super Saver Scheme work in practice and is it really worth all the fuss?
As an example, let's assume a couple are looking to buy their first home together and they are earning $70,000 each per year.
Using the Federal Government's First Home Super Saver Scheme Estimator, if both parties salary sacrifice $15,000 a year into the same superannuation account, they should be able to save approximately $50,710 in two years.
At the end of the day, the couple come out approximately $11,604 better off than if they had both contributed $15,000 a year to the one savings account with a standard interest rate.
According to the Federal Government, the First Home Buyer Saver Scheme can help first home buyers save for a home deposit 30% faster than a standard deposit account.
The scheme will be administered by the Australian Taxation Office, which will receive an additional funding of $9.4 million to implement it.
The ATO will also be responsible for ensuring that fund members are first home buyers and that the funds withdrawn will be used to buy a home.
The government has estimated that the scheme will cost the budget $250 million over four years.