What's taking place in 2018
Tax incentives will be available 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 (up to a certain limit) to put toward their first home.
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If eligible, the maximum amount of contributions that can be withdrawn under the scheme is $30,000 for individuals or $60,000 for couples.
To be able to withdraw this money, eligible candidates must apply to the Australian Taxation Office and if they are eligible, a one-time-only withdrawal is permitted under the scheme.
Due to superannuation’s favourable tax treatment, this initiative may help first home buyers to build a deposit more quickly.
Downsizers will be able to put more into super
Currently, those who are aged between 65 and 75 must satisfy a work test to make voluntary super contributions, while those over 75 are generally unable to contribute to their super.
From 1 July 2018, this will change. Those aged 65 or over will be able to make an after-tax contribution to their super of up to $300,000 with the proceeds from the sale of their family home. This is regardless of their work status or superannuation balance.
Meanwhile, both members of a couple are able to take advantage of this incentive, meaning $600,000 per couple can be contributed toward super.
To qualify, the property sold needs to have been the individual or spouse’s main place of residence for at least 10 years.