Parliament has legislated the downsizing measure that will allow older Australians to contribute the proceeds of the sale of their family home to super, and the First Home Super Saver Scheme (FHSSS) where first-home buyers can save for a deposit inside their super fund.
In a statement released last Thursday, Treasurer Scott Morrison said both measures were key elements of the government’s comprehensive housing affordability plan.
“The Turnbull government is continuing to deliver on its commitment to ensure all Australians have access to secure, stable and affordable housing,” Morrison said.
The downsizing measure removes a financial obstacle for older Australians who are considering moving to homes that better suit their needs.
From 1 July 2018, when Australians aged 65 and over sell a home they have owned for at least 10 years, they may contribute up to $300,000 from the proceeds to their super, over and above the existing contribution restrictions.
Both members of a couple can take advantage of this measure, together contributing up to $600,000 from the proceeds of the sale into super.
The government is hoping the downsizer measure encourages older Australians, where appropriate, to free up homes that no longer meet their needs for younger growing families.
The FHSSS allows individuals to contribute up to $30,000 – up to $15,000 a year within existing caps – into super, which means an eligible couple could contribute up to $60,000 as deposit savings.
According to the government, most first-home buyers will be able to accelerate their savings by at least 30 per cent using the scheme.
From 1 July 2018, first-home buyers will be able to withdraw voluntary super contributions they’ve made since 1 July 2017, along with a deemed rate of earnings, to help buy their home.