The Australian senate has passed legislation for the First Home Super Saver Scheme, as part of the federal government’s efforts to provide relief for the nation’s housing affordability crisis.
Under the scheme, from 1 July 2018, first home buyers will be able to withdraw voluntary superannuation contributions they’ve made since 1 July 2017, along with a deemed rate of earnings, to help buy their home.
According to the government, with each Australian able to deposit up to $30,000 (up to $15,000 a year within existing caps) into their super fund under the scheme, an eligible couple could potentially contribute up to $60,000 under the scheme, and accelerate their savings by at least 30%.
As well as helping first home buyers save for a deposit, the scheme is also designed to help improve the supply of family homes for sale, by encouraging Australian retirees with empty nests to sell and downsize with the incentive of bonus super savings.
From 1 July 2018 when individuals aged 65 and over sell a home they have owned for at least 10 years, they may contribute up to $300,000 ($600,000 for couples) from the proceeds into their superannuation accounts.
The scheme has not gone without criticism, with Industry Super Australia arguing that the scheme “would offer limited benefit to first home savers and threaten retirement savings,” potentially deteriorating the super assets of Australians, and even drive up housing demand to the point where first home buyers are locked out of the market or saddled with crippling debt.