Downward pressure on housing costs

OLDER Australians can pump an extra $300,000 into their superannuation fund when they downsize their homes.

And first home buyers will be able to save for a deposit by salary sacrificing into their superannuation account above their compulsory superannuation contribution from July 1.

Treasurer Scott Morrison told Federal Parliament such moves would help put downward pressure on rising housing costs.

He said a new plan for first home buyers would accelerate their savings by at least 30%.

The new First Home Super Savers Scheme will attract the tax advantages of superannuation but contributions are limited to $30,000 per person in total and $15,000 per year.

“Contributions and earnings will be taxed at 15%, rather than marginal rates, and withdrawals will be taxed at their marginal rate, less 30 percentage points,” Mr Morrison said.

“We will encourage older Australians to free up housing stock, by enabling downsizers over the age of 65 to make a nonconcessional contribution of up to $300,000 into their superannuation fund from the proceeds of the sale of their principal home.”

Mr Morrison said mum and dad investors would still be able to use negative gearing, supporting the supply of rental housing.

The government is increasing the capital gains tax discount to 60% to encourage investment and will ensure greater income certainty through direct deduction of welfare payments from tenants.

The government will also establish a $1b National Housing Infrastructure Facility, based on a UK model, to fund micro city deals that remove infrastructure impediments to developing new homes and an online land registry detailing sites available for residential development.