Long term view for housing

AHEAD of the Budget there has been attention on ways to encourage first home buyers to try and crack into the market.

Suggestions include giving them generous tax breaks by allowing them to direct pre-tax income into a savings account to help them get their foot on the property ladder.

Under that scheme, hopeful property buyers could contribute just $5000 of their pre-tax earnings into a savings account, effectively reducing their taxable income by $5000 in that year.

An additional $5000 a year post-tax income could be added to the account, taxed at a concessional rate.

Mortgage Choice spokesman John Flavell said “anything that can be done to help first home buyers achieve their property dreams should be welcomed.”

But he warned entry-level buyers should adopt other strategies to ensure they have a long-term goal to invest their money into property.

“First home buyers need to be prepared to implement a few other savings strategies, like saving a specific amount of their wage; cutting back on unnecessary extras (like overseas holidays or new cars); and choosing …affordable accommodation,’’ he said.

“In addition, first home buyers need to be savvy with where they put their money.”

Overall a good guide for people is to try and save at least 10 per cent of their income or invest it elsewhere.

Each year the Federal Government releases its planned spending in key areas including agriculture, defence, science, trade and youth.

But for Aussies focusing on their super or their own longterm investment – which has gone largely untouched so far in the budget lead-up – education is one of they keys to achieving financial stability.

Ms Shourbaji said she would like the Federal Budget to include more funding for schools to “allow for more teacher aides to be available in the early year level.”