Changes aimed at improving housing affordability have passed through parliament. See what the new rules could mean for you.
Government proposals around improving housing affordability in Australia were passed through parliament on 7 December 20171.
As part of the changes, first home buyers will be given a tax concession through the ability to save for a home deposit inside super, while Australians aged 65 and over will be able to contribute the proceeds from the sale of their family home into super.
We take a look at what the changes could mean for you, bearing in mind that like with all important financial decisions, it's a good idea to get financial advice before deciding what's right for you.
Tax concession for first home buyers
From 1 July 2018, eligible first home buyers will be able to withdraw voluntary super contributions (which they've made since 1 July 2017), along with associated investment earnings, to put toward a home deposit.
How does it work?
Under the First Home Super Saver Scheme (FHSSS), first home buyers who make voluntary contributions of up to $15,000 per year into their super can withdraw these amounts, in addition to associated earnings, from their super fund to help with a deposit on their first home.
If eligible, the maximum amount of contributions that can be withdrawn under the scheme is $30,000 for individuals or $60,000 for couples.
Voluntary contributions can be made by salary sacrificing from before-tax income, by making personal tax-deductible contributions, or by making personal after-tax super contributions.
When the money is withdrawn, before-tax and tax-deductible contributions are taxed at your marginal tax rate, less a 30% tax offset, while after-tax contributions aren’t subject to tax.