Super idea in 2017 Budget for first home buyers

Super idea in 2017 Budget for first home buyers
Super idea in 2017 Budget for first home buyers

Young first home buyers willing to save are the big Budget winners thanks to a simple superannuation top-up scheme that offers generous tax breaks.

The Budget also offers the elderly an incentive to down-size homes with tax breaks too.

Treasurer Scott Morrison has shown no restraint on taxing foreigners either – which is a big revenue earner.

And Aussie investors will lose travel expense claims when they inspect their investment property interstate. This measure will save about $200 million annually.

The headline housing measure kicks in from July 1 when the first-home buyer can salary sacrifice into their super account above their already hefty compulsory contribution.

For Sydney buyers, there’s an issue with the low cap as The First Home Super Savers Scheme limits total contribution to $30,000 per person or $60,000 a couple, so the bank of mum and dad will still be needed to get anything close to Sydney’s median $990,000 house or $740,000 unit.

Regular super contributions remain off limits. But certainly it’s better than money in the bank, as Treasurer Scott Morrison calculates most will accelerate savings by 30 percent.

The measure will cost the government about $65 million annually. The downsizing incentive is calculated to cost about $10 million annually, with a delayed 2018 start.

Unfortunately, this mean it would be premature to expect a flood of five bedroom houses hitting the market any time soon.

Taxing foreigners in many ways is the revenue treat in the Budget, which could turn them away.

Capturing the $5000 plus annual tax on vacant properties owned by foreigners – the so-called ghost home tax – will be tricky. Though they could start by looking at the lights off in Haymarket.

This article was first published in the Daily Telegraph.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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First Home Buyers Budget

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