The two key superannuation-related measures contained in the 2017 federal budget have no specified usage or expiry period, requiring SMSFs and superannuants to be vigilant around their plans to adopt either strategy.
On 9 May, Treasurer Scott Morrison announced a budget measure aimed at encouraging older Australians to free up housing stock by enabling those over the age of 65 who were downsizing their home to make non-concessional contributions of up to $300,000 into their super fund from the proceeds of the sale of their principal home.
The government would also provide a tax cut on first home deposit savings where first home buyers would be able to save for a deposit by salary sacrificing into their super account above their compulsory super contribution from 1 July.
SMSF Association head of policy Jordan George said the budget papers did not specify whether those measures would continue indefinitely or be offered for a limited time only.
“The budget measures didn’t mention a time limit, so it’s going to be a question for government in the long term,” George told selfmanagedsuper.
“If the housing market does change and there’s not a need for it any further, will they need to keep that feature as part of the super system?”
He added it would be interesting to monitor the take-up rate of the measures, particularly the salary sacrificing for a home deposit.
“We previously saw the First Home Savers Account, which people did not take up in great numbers,” he noted.
“So the government ended up getting rid of it.
“And it’s a similar scenario here – if people don’t take it up as an opportunity to save for a house deposit, I don’t think the government will keep it for the long term.”
