Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Act 2017 (132 of 2017)

Schedule 1   First home super saver scheme

Part 2   Tax consequences of scheme

Income Tax Assessment Act 1997

12   At the end of Part 3-30

Add:

Division 313 - First home super saver scheme

Table of Subdivisions

Guide to Division 313

313-A Preliminary

313-B Assessable income and tax offset

313-C Purchasing or constructing a residential premises

313-D Contributing amounts to superannuation

313-E First home super saver tax

313-F Review of decisions

Guide to Division 313

313-1 What this Division is about

If an amount is released from your superannuation interests under the first home super saver scheme, an amount may be included in your assessable income and you may become entitled to a tax offset.

You also have a limited period within which to enter into a contract to purchase or construct a residential premises or re-contribute an amount to your superannuation. If you do not notify the Commissioner that you have done one of those things, you become liable for tax.

Subdivision 313-A - Preliminary

Table of sections

Operative provisions

313-5 Object of this Division

313-10 Application of this Division

Operative provisions

313-5 Object of this Division

The object of this Division is to provide an individual with concessional tax treatment for amounts released from superannuation for the purposes of purchasing or constructing the individual's first home.

313-10 Application of this Division

This Division applies to you if one or more amounts (the FHSS released amounts ) are paid in response to a release authority issued under Division 131 in Schedule 1 to the Taxation Administration Act 1953 in relation to a *first home super saver determination made in relation to you.

Subdivision 313-B - Assessable income and tax offset

Guide to Subdivision 313-B

313-15 What this Subdivision is about

An amount is included in your assessable income, and you are entitled to a tax offset, if an amount is paid in response to a release authority issued in respect of you.

The amount included in your assessable income relates to the concessional contributions and total associated earnings that are stated in the relevant first home super saver determination.

Table of sections

Operative provisions

313-20 Amount included in assessable income

313-25 Amount of the tax offset

Operative provisions

313-20 Amount included in assessable income

(1) Your assessable income, for the income year that corresponds to the *financial year for which you requested the release authority, includes an amount that is equal to the sum of the following amounts stated in the *first home super saver determination:

(a) your *concessional contributions;

(b) your associated earnings.

(2) However, if the sum of the *FHSS released amounts is less than the *FHSS maximum release amount stated in the determination, the amount included in your assessable income for the income year is:

(a) the amount worked out under subsection (1); less

(b) the difference between the FHSS maximum release amount and the sum of the FHSS released amounts.

(3) If the amount worked out under subsection (2) is negative, the amount included in your assessable income for the income year is nil.

Note 1: The release authorities are issued under Division 131 in Schedule 1 to the Taxation Administration Act 1953.

Note 2: Any amounts paid in response to the release authorities are non-assessable non-exempt income (see section 303-15).

313-25 Amount of the tax offset

You are entitled, for the income year mentioned in section 313-20, to a *tax offset that is equal to 30% of your *assessable FHSS released amount for the income year.

Note: This offset cannot be refunded, transferred or carried forward (see item 20 of the table in subsection 63-10(1)).

Subdivision 313-C - Purchasing or constructing a residential premises

Guide to Subdivision 313-C

313-30 What this Subdivision is about

If an amount is released from your superannuation interests under the first home super saver scheme, and you enter into a contract within a particular period to purchase or construct a residential premises, you must notify the Commissioner of that contract.

Table of sections

Operative provisions

313-35 Purchasing or constructing a residential premises

313-40 Notifying Commissioner

Operative provisions

313-35 Purchasing or constructing a residential premises

(1) Section 313-40 applies to you if:

(a) within 12 months after the release of the first *FHSS released amount or, if the period is extended under subsection (2), that longer period, you enter into a contract to purchase or construct a *CGT asset that is a *residential premises; and

(b) the price for the purchase or construction of the premises is at least equal to the sum of the FHSS released amounts; and

(c) you have occupied the premises, or intend to occupy the premises as soon as practicable; and

(d) you intend to occupy the premises for at least 6 months of the first 12 months after it is practicable to occupy the premises.

(2) The Commissioner may extend the period for entering into a contract by up to 12 months.

Note: If you request an extension of the period, you may object against a decision of the Commissioner under this section (see section 313-85).

313-40 Notifying Commissioner

(1) You must notify the Commissioner in the *approved form of the matters set out in paragraphs 313-35(1)(a) to (d).

(2) The notification must be made within 28 days, or such longer period as the Commissioner allows, after you enter into the contract to purchase or construct the *residential premises.

Note: If you request an extension of the period, you may object against a decision of the Commissioner under this subsection (see section 313-85).

(3) Subsection (1) does not limit the information that the *approved form may require the notification to contain.

Subdivision 313-D - Contributing amounts to superannuation

Guide to Subdivision 313-D

313-45 What this Subdivision is about

If an amount is released from your superannuation interests under the first home super saver scheme, and you do not enter into a contract within a particular period to purchase or construct a residential premises, you may make one or more non-concessional contributions. If you do not notify the Commissioner that you have made the contributions, you may be liable for tax under Subdivision 313-E.

Table of sections

Operative provisions

313-50 Contributing amounts to superannuation

Operative provisions

313-50 Contributing amounts to superannuation

(1) This section applies to you if:

(a) you do not notify the Commissioner in accordance with section 313-40 (about purchasing or constructing a *residential premises); and

(b) you make one or more *non-concessional contributions the sum of whichis at least equal to:

(i) your *assessable FHSS released amount for an income year; less

(ii) the amount withheld by the Commissioner from your *FHSS released amounts under section 12-460 in Schedule 1 to the Taxation Administration Act 1953; and

(c) you make the contributions within the period mentioned in paragraph 313-35(1)(a).

Note: Paragraph 313-35(1)(a) sets out the period in which you must have entered into a contract to purchase or construct a residential premises.

(2) You may notify the Commissioner in the *approved form that you have made the contributions mentioned in paragraph (1)(b).

Note 1: If you notify the Commissioner, you cannot deduct the contribution (see section 290-168).

Note 2: If you do not notify the Commissioner, you may be liable for tax (see Subdivision 313-E).

(3) The notification must be made within the period mentioned in paragraph 313-35(1)(a) or such longer period as the Commissioner allows under this subsection.

Note: If you request an extension of the period, you may object against a decision of the Commissioner under this subsection (see section 313-85).

(4) Subsection (2) does not limit the information that the *approved form may require the notification to contain.

Subdivision 313-E - First home super saver tax

Guide to Subdivision 313-E

313-55 What this Subdivision is about

If an amount is released from your superannuation interests under the first home super saver scheme, you are liable for tax if you do not, within a particular period, do either of the following:

(a) enter into a contract to purchase or construct a residential premises, and notify the Commissioner of that contract;

(b) make one or more non-concessional contributions, and notify the Commissioner of the contributions.

Table of sections

Operative provisions

313-60 First home super saver tax

313-65 When tax is payable - original assessments

313-70 When tax is payable - amended assessments

313-75 General interest charge

Operative provisions

313-60 First home super saver tax

You are liable to pay *first home super saver tax if:

(a) neither of section 313-40 or 313-50 applies to you; or

(b) section 313-40 applies to you and you do not notify the Commissioner in accordance with that section; or

(c) section 313-50 applies to you and you do not notify the Commissioner in accordance with that section.

Note 1: The amount of the tax is set out in the First Home Super Saver Tax Act 2017.

Note 2: Section 313-40 is about purchasing or constructing a residential premises. Section 313-50 is about making one or more non-concessional contributions.

313-65 When tax is payable - original assessments

Your *assessed first home super saver tax is due and payable at the end of 21 days after the Commissioner gives you notice of the assessment of the amount of the *first home super saver tax.

Note: For assessments of first home super saver tax, see Division 155 in Schedule 1 to the Taxation Administration Act 1953.

313-70 When tax is payable - amended assessments

If the Commissioner amends your assessment, any extra *assessed first home super saver tax resulting from the amendment is due and payable 21 days after the day the Commissioner gives you notice of the amended assessment.

313-75 General interest charge

If an amount of *assessed first home super saver tax that you are liable to pay remains unpaid after the time by which it is due to be paid, you are liable to pay the *general interest charge on the unpaid amount for each day in the period that:

(a) begins on the day on which the amount was due to be paid; and

(b) ends on the last day on which, at the end of the day, any of the following remains unpaid:

(i) the assessed first home super saver tax;

(ii) general interest charge on any of the assessed first home super saver tax.

Note: The general interest charge is worked out under Part IIA of the Taxation Administration Act 1953.

Subdivision 313-F - Review of decisions

Guide to Subdivision 313-F

313-80 What this Subdivision is about

You may object against particular decisions made under this Division.

Table of sections

Operative provisions

313-85 Review rights for decisions made under this Division

Operative provisions

313-85 Review rights for decisions made under this Division

(1) If:

(a) you requested the Commissioner to allow a longer period under:

(i) subsection 313-35(2) (for entering into a contract to purchase or construct a *residential premises); or

(ii) subsection 313-40(2) or 313-50(3) (for notifying the Commissioner of matters); and

(b) you are dissatisfied with:

(i) a decision under that subsection allowing a longer period; or

(ii) a decision the Commissioner makes not to allow a longer period;

you may object against the decision in the manner set out in Part IVC of the Taxation Administration Act 1953.

(2) To avoid doubt, for the purposes of paragraph (e) of Schedule 1 to the Administrative Decisions (Judicial Review) Act 1977, the making of a decision under a subsection mentioned in paragraph (1)(a) of this section is a decision forming part of the process of making an assessment of tax, and making a calculation of charge, under this Act.