In a pre-Christmas boost for savers the First Home Super Saver Scheme legislation was finalised by parliament on Thursday [7 December 2017]. Leading superannuation expert Dixon Advisory has welcomed the passing of the legislation, which will help first home buyers to build a home deposit through the super system.
“Property prices remain high in many parts of Australia, creating immense affordability challenges for first home buyers. Having this certainty about how to access support is important to help buyers plan out their finances over the summer break and for the year ahead,” Dixon Advisory’s Head of Advice Nerida Cole said.
“The First Home Super Saver Scheme offers tax concessions for first home buyers, to help them get to their savings target more quickly. For an average wage earner – if they are able to maximise the $30,000 limit over a 2-year period they will have approximately $5,000 more in their pocket to help with the home deposit – compared to saving in their personal name. These extra tax concessions alone won’t be enough to fund a home deposit, but it can help shave time off how long it takes to save a deposit, or limit how long the person needs to work in a second job” Ms Cole said.
The final First Home Super Saver Scheme legislation included more flexibility than an earlier version of the scheme, but as Super Guarantee contributions remain inside the super system for retirement, the integrity of the super system is protected. Other key features include:
• No time limit on the account.
• Individuals can start saving up to $15,000 per annum from 1 July 2017 up to an overall max $30,000.
• No need to open a separate account.
• First withdrawals accessible from 1 July 2018.
Ms Cole also noted the importance of measures to help improve housing affordability, as: “Having a good financial situation in retirement involves much more than just what your super balance is – not owning a home in retirement creates enormous financial stress and instability.”
The Downsizing proposal that also passed the senate is aimed at removing one of the barriers to downsizing the family home for people 65 years of age and over, by allowing some funds to be deposited into super and will be available from 1 July 2018.
Source: Dixon Advisory