First home buyers boost

EMPTY nesters will be encouraged to sell up and downsize with a $ 600,000 tax break designed to get more homes on the market for young families.

The Turnbull Government will also give first home buyers a leg up, creating a salary sacrificing scheme allowing them to save $ 30,000 for a deposit in their super accounts.

The government’s longawaited housing affordability package also cuts back negative gearing and capital gains tax benefits, saving $ 1.6 billion over four years to pay for a $ 1 billion infrastructure fund to reduce costs for developers.

Treasurer Scott Morrison, in his Budget speech last night, said affordable housing would help make “all of life’s other challenges become more manageable”.

In the weeks leading up to the Budget, the government tried to temper expectations about what it could do to improve housing affordability, and Mr Morrison reiterated last night there “there are no silver bullets”.

But he pledged that the Turnbull Government “can make a difference” with a package that also includes:

A NEW “ghost house” tax of at least $ 5000 a year on foreign investors who don’t occupy or lease their properties for at least half the year.

BANS on developers selling more than half of new developments to overseas investors.

LONG- term, low- cost finance for affordable rental housing from a National Housing, Finance and Investment Corporation that will aim to attract big dollars from super funds.

PERMANENT support for the homeless, initially costing $ 375 million, and a redesigned National Housing Affordability Agreement with the states to lift housing supply.

Mr Morrison said the government’s plan aimed to help those saving to buy or struggling with their mortgage repayments, and those on public housing waiting lists or living on the streets.

Mr Morrison said the young super savers scheme would help to speed up their savings by at least 30 per cent compared to a normal deposit account.

Australians over 65 will also be encouraged to sell up, with new rules letting them make a non- concessional super contribution of up to $ 300,000 from the sale of their family home.

Couples will both be able to make the contribution, reaching $ 600,000 between them.

The government ignored a push from Labor to make wholesale changes to negative gearing, but found $ 800 million in savings over four years by limiting deductions investors can make.

Tighter limits on capital gains tax benefits for foreign and temporary residents will add another $ 600 million to the Budget bottom line.

Mr Morrison said the government would “continue to prefer the scalpel to the chainsaw” to prevent a housing shock which would hurt the economy.