The Australian federal government has taken steps towards addressing the nation’s housing affordably crisis, releasing draft legislation to help first home buyers save for a deposit, support retirees who choose to downsize, and to limit the impact of foreign investment on property prices.
The draft legislation for the First Home Super Saver Scheme (FHSSS) is set to allow first home buyers to use their superannuation fund to securely store their savings and build up their home deposit.
According to Federal Treasurer, Scott Morrison:
Savers will be able to contribute $30,000 (up to $15,000 a year within existing caps), and be able to withdraw the contributions along with deemed earnings in order to help fund a deposit on their first home.
The other measure in the draft legislation comes at the other end of the superannuation cycle, offering superannuation incentives to retirees over 65 if they choose to sell their family home and downsize their property. By selling their old house and moving to home that better suits their needs, more larger houses can be made available for young families, and retirees can contribute up to $600,000 into their superannuation fund.
While these measures are due to come into effect from 1 July 2018, it is understood that voluntary super contributions made from 1 July 2017 will be eligible for withdrawal as a house deposit in mid 2018.
The third piece of draft legislation is a taxation measure, aimed to limit the exemptions that foreign tax residents can claim on their capital gains tax. According to the treasury, these changes to foreign investors buying residential real estate are part of a package estimated to add $600 million in revenue over the forward estimates.
Overall, these new and modified pieces of legislation are intended to contribute to lowering the cost of living for Australians and address the issue of housing affordability:
“Housing affordability is a major issue affecting many Australians and there is no silver bullet.”
“The Government’s comprehensive plan will improve outcomes across the housing spectrum – from the homeless and those who depend on social housing, to first home buyers and older Australians looking to downsize.”