Author: Aleks Vickovich of AFR
The government will allow first home buyers to raid up to $50,000 of their own contributions to their superannuation fund to help them get on the property ladder at a cost of $25 million over four years.
The maximum amount of money able to be released through the First Home Super Saver Scheme introduced in 2017 will be increased from $30,000 to $50,000 of savers’ voluntary contributions.
Some single parents will be able to buy new-build properties with a 2 per cent deposit.
First revealed by The Australian Financial Review last Friday, the measure will cost $25 million over the forward estimates, according to budget documents. Any voluntary contributions made under the scheme since July 2017 will count towards the new maximum able to be withdrawn.
The measure is being seen as a possible precursor to a more controversial policy opening up all superannuation contributions to fund property purchases, as advocated by vocal Coalition MPs Andrew Bragg and Tim Wilson.
Treasurer Josh Frydenberg told the Financial Review last week that although the budget would not contain changes allowing the use of super to buy a house, the government had not given up on the idea. “We just continue to examine all options, we don’t close doors,” he said.
A number of additional technical changes to the first home saver scheme will be introduced, including giving the Commissioner of Taxation power to revoke or amend applications under the scheme or return any released money to superannuation funds.
Separately. the government will offer 10,000 Family Home Guarantees to eligible single parents allowing them to build homes or purchase select existing properties with deposits as low as 2 per cent.
Downsizer contribution age lowered
At the other end of the retirement spectrum, the government will lower the minimum age for the downsizer super contribution from 65 to 60.
“This will allow Australians nearing retirement to make a one-off post-tax contribution of up to $300,000 per person (or $600,000 per couple) when they sell their family home,” the budget documents said.
“This improves the flexibility for Australians to contribute to their superannuation savings, and may encourage people to downsize sooner and increase the supply of family homes.”
The measure has been positioned as positive for first home buyers by freeing up stock for younger property aspirants.
Australians aged between 67 and 74 will no longer be required to meet the so-called work test – under which they must work at least 40 hours in a 30-day period – in order to make non-concessional or salary sacrifice contributions to their super fund.
“Removing the requirement to meet the work test when making non-concessional or salary sacrifice contributions will simplify the rules governing superannuation contributions and will increase flexibility for older Australians to save for their retirement through superannuation,” the budget documents said.
The measure is expected to hit receipts by $30 million over four years and result in an increase in payments of $3.7 million.
Credits to Aleks Vickovich and AFR for the article