Superannuation measures to improve housing affordability

Monday 11 September 2017

A bill establishing a First Home Super Saver Scheme and allowing special ‘downsizing’ superannuation contributions has been tabled in Parliament. These measures were announced by the Government in the May 2017 Federal Budget to improve housing affordability.

The First Home Super Saver Scheme (FHSSS) allows individuals aged 18 or over to withdraw eligible superannuation contributions and associated earnings from 1 July 2018 to purchase their first home.

The provisions relating to the FHSSS are largely the same as those contained in the draft legislation that was released for consultation in July 2017. However, to request a payment under the FHSSS, the bill requires the individual to never have held a freehold interest, a long-term lease of at least 50 years (including renewals and extensions), or a company title interest in real property in Australia. This a change from the draft legislation which required the individual to never have held an interest in taxable Australian real property (as defined in the tax law). For further details on the FHSSS see Macquarie article Super savings accessible for first home buyers.

The bill also allows those aged 65 or over to use the capital proceeds from the sale of their main residence (excluding mobile homes) to make a ‘downsizer’ contribution of up to $300,000. The downsizer contribution is available where the property is located in Australia, has been owned by the individual or their spouse for at least 10 years and the sale contract is entered into on or after 1 July 2018. The $300,000 limit applies to each member of a couple.

Further information

Australian Government, Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017

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