Scheme will let first home buyers save through super fund

Another measure that could free up more family homes is enabling downsizers over the age of 65 to make a non-concessional contribution of up to $300,000 into their super fund from the process of the sale of the family home.

Some forecasts have suggested about 50,000 more family homes could come onto the market, helping to ease prices.

And despite predictions, the Government is making some minor changes to negative gearing.

Owners of holiday homes or other investment properties won’t be able to claim tax deductions to visit them.

And in a measure that will save a quarter of a billion dollars over the next four years, plant and equipment depreciation deductions – on items that can be easily removed such as carpets and dishwashers – will only be allowed by those investors who incurred the expense.

The Budget also announced a foreign investment levy of “at least” $5000 on future foreign investors who leave their property vacant for more than six months.

Of the first homebuyer savings plan, which will cost $250 million over the next four years, Treasurer Scott Morrison described it as far superior to that introduced by former Labor PM Kevin Rudd – axed by Tony Abbott in the 2014 Budget.

He said the Rudd plan was “a complete flop because it was too hard, it wasn’t simple”. “It was very confusing. “This one you just tick a form to say that in addition to your compulsory super deposit, you want 5, 2 or 3 per cent of your wage to go into this account.”

Mr Morrison said most first home buyers would be able to accelerate their savings by at least 30 per cent. The benefit to first home buyers comes from the low tax rules that apply when people salary sacrifice, with contributions and earnings taxed at 15 per cent rather than marginal rates.