As part of the Federal Government’s Budget housing affordability measures, first-home buyers can now use up to $30,000 of voluntary superannuation contributions to put towards a deposit on their first home.
The move means first-home buyers can withdraw super contributions above the 9.5 per cent guarantee and use it to buy property.
The plan kicks in on July 1 next year, but first-home buyers can start making contributions from July 1 this year.
The Government hopes to offset any rise in house prices from the measure by increasing housing supply in other measures featured in this year’s Budget.
Property markets could well see prices rise off the move in those inner city areas where supply can’t be increased.
The contributions will be taxed at 15 per cent and withdrawals will be taxed at 30 percentage points below the person’s marginal tax rate. By pushing money into superannuation at better tax rates, it will help first-home buyers save a deposit faster.
Currently in Melbourne, the average time it takes home buyers to save a deposit has risen to six years, but from July 1 first-home buyers will be able to make super contributions of $15,000 a year, capped at $30,000 in total which they can then withdraw for a house deposit
The measure is expected to cost the Federal Government $250 million over the next four years.