- Establish $1B infrastructure facility to remove impediments to developing new homes
- New National Housing Finance and Investment Corporation to provide long-term, low-cost finance
- $375 million for homelessness funding to the states
- Tax cut on first home deposit savings – FHB able to salary sacrifice into Super for deposit
- Homeowners over 65 looking to down size able to make a contribution of $300,000 into super
OLDER Australians who downsize their home will be able to pump an extra $300,000 each into their superannuation fund from the sale proceeds.
The incentive, to start from July 2018, is designed to remove a key barrier to downsizing and free up larger homes for younger families.
Some retirees will also benefit from pensioner concession cards being restored to people who lost them when the tougher assets test came into force in January this year.
The downsizing incentive will apply to people aged over 65 who sell their main residence, having owned it for at least 10 years.
A couple will be able to use it for the same home, each person making a non-concessional — after-tax — contribution of up to $300,000.
“These contributions will be in addition to those currently permitted under existing rules and caps and they will be exempt from the existing age test, work test and the $1.6 million balance test for making non-concessional contributions,” the Budget papers say.
Financial planning group StatePlus’s chief customer officer, Jason Andriessen, said retired homeowners were holding more wealth in housing than ever before.
“Eighty per cent of retirees own their own home but they don’t have much superannuation to live off,” Mr Andriessen said. “Downsizing to free up capital makes a great deal of sense for many Australian retirees and pre-retirees.”
The downsizing measure is forecast to cost the Budget $30 million over four years, while reinstating the pensioner concession card — which provides access to benefits such as subsidised hearing services — is a one-off cost of $3.1 million.
How the Federal Budget will affect you
As for first home buyers, they will pay less tax on their deposit savings after they are able to salary sacrifice into their superannuation.
The Government will also create a $1 billion National Housing Infrastructure Facility to remove impediments to developing new homes, as well as a new National Housing Finance and Investment Corporation to provide long-term, low-cost finance to support more affordable rental housing.
Superannuation has been left largely untouched in the Budget, as the industry works on a wide range of rule changes — announced in the last year — that come into force on July 1.
Some tweaks were made to “improve the integrity of the superannuation system” for self-managed super funds, raising an extra $24 million over four years.