The Government's first home super saver scheme was supposed to help young people buy a house, but it can take so long to get the money out one Hack listener saw his dream home slip through his fingers.

A month ago Talis found his dream home. A townhouse that backed on to a nature reserve, 20 minutes from where he's working.

How the first home buyer super saver scheme works First home buyers can put up to $15,000 of their salary into their super each year, with a maximum of $30,000

Couples can pool their savings together

Putting money into super attracts less tax, and greater interest

The money has to be withdrawn before you buy a house

Only 544 people have used the scheme to help buy a home so far

He had money sitting in the Government's first home super saver scheme after hearing about it last year on Hack, so he did a handshake deal and started the process of getting his money out.

Fast forward four weeks and that dream is over.

"My money has essentially been stuck with the super fund and the [Australian Tax Office] seems to be unable to come to a resolution for how to process this money," Talis told Hack.

"Even though the realtor and the seller was very accommodating along the way, they pushed the timelines out a lot longer than you would expect from a traditional sale, still I could not execute it in the time."

Talis had to withdraw his interest and over the weekend someone else submitted an offer that was accepted by the owners.

A super scheme?

The first home super saver scheme is the key component in the government's plan to fix housing affordability for young people in Australia.

It's built around superannuation funds, with potential buyers making voluntary contributions that they can withdraw when they're ready to buy a house. You can tip in up to $15,000 a year and withdraw a max of $30,000 at the other end.

The incentive is in the tax savings and the extra interest you earn while the money is in your super.

Getting the money out is a bit of a process though and Talis says it's that process that cost him a house.

Anyone that finally gets the opportunity to by their first home is pretty excited for it so it's a bit of a kick in the guts.

He put in a request through the ATO as soon as he found the place he wanted to buy, but 10 days later the money hadn't moved from his super account. When he tried to call the tax office to find out what was going on, no-one could help.

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"People buy on emotion"

In a perfect world first homebuyers would have all their ducks in a row before finding their dream home, but that's not how it works.

Joel Wyld is the director of Peasy, a company the specialises in helping first home buyers into the market, and he says barely anyone he sees is as ready as they should be.

"From our experience, it's unstructured and frantic," he told Hack.

Taking up to a month for people to access those funds is just way too long for someone who wants to get into the market.

The ATO will hit homebuyers with a tax penalty if they sign a contract before the money is released or if it's not used to buy a house within 12 months. If you get too far ahead of yourself and sign a contract before applying for the money to be released, it could be locked away until you retire.

Joel says the withdrawal timelines don't work with how people buy their first house.

"There could be an argument on the other side that people need to be more prepared, and I kind of agree with that, but we have to deal with the reality which is that people tend to buy on emotion.

"Ultimately when they're deciding on the property they love they tend to move quicker than what this scheme would allow."

A broader issue

Talis isn't the only one who's been burnt by this scheme. Hack heard several other horror stories.

Ebony started putting money into the scheme after her Dad tipped her off, but when she found a house she wanted to buy the money didn't come out in time.

"I still bought the house, I've signed the contract, but I don't have the money which means I'm not eligible for the tax cut," she said.

That means Ebony will be get slugged with a bill when her tax rolls around next year.

Julie is in a similar boat after signing a contract for a house at the start of July.

"We actually ended up having to borrow the money off my parents to be able to settle because we didn't have the fund from the Super yet."

"Early days"

While this scheme was announced in the budget last year people have only been able to withdraw money since the 1st of July 2018.

Assistant Minister to the Treasurer, Michael Sukkar, told Hack he felt for Talis but was glad he'd given the saving scheme a crack.

"I say to him and the other 500 people who've withdrawn money from the scheme, we're glad for those 500 it's helped them get into a first home.

"To Talis specifically we'll look into how we can make it faster, because we take the feedback on board, but there's clearly hundreds of people out there who've benefited."

The ATO has confirmed to Hack only 254 withdrawal requests were made in the first month, worth more than $6 million clams.

Assistant Minister Sukkar said there was flexibility built into the system but promised improvements by looking at how the process can be sped up through the ATO and super funds.

"Look, I think 25 days is a bit long, we'd like it to be faster and I suspect that as the scheme becomes a bit more mature we'll be able to streamline that and get it faster.

"I would hope no-one is suggesting that a really serious tax cut for first home buyers is somehow not worth it because there's been a degree of difficulty for Talis, admittedly annoying to him, in the first month of the scheme.

We'll do everything we can to try and make that as fast as possible.

Talis is still going to buy a house, not just because the ATOs rules mean he has to within 12 months of withdrawing this money.

"It's everyone's dream to buy their first home, it's the Australian dream, so it hasn't put me off trying to buy a home, it's I guess put me off trusting the government," he told Hack.

"This scheme was developed to make it easier for first homebuyers to buy a house, in my particular situation it's made it much more difficult and the tax concessions I did get, looking back at it I'm going, was it worth it?"