Save
Superannuation downsizing measures to become reality
The government has passed elements of its housing affordability plan, allowing those over the age of 65 to funnel money from the sale of their home into super.
Superannuation downsizing measures to become reality
The government has passed elements of its housing affordability plan, allowing those over the age of 65 to funnel money from the sale of their home into super.
As of 1 July 2018, Australians aged 65 and over who are selling a home they’ve owned for at least 10 years will be able to funnel up to $300,000 of the proceeds into their superannuation accounts.
This is “over and above existing contribution restrictions”, Treasurer Scott Morrison and assistant minister, Michael Sukkar MP said in a statement about the First Home Super Saver Scheme (FHSSS).
They said: “The downsizing measure removes a financial obstacle from older Australians who are considering moving to homes that better suit their needs.
“Both members of a couple may take advantage of this measure, together contributing up to $600,000 from the proceeds of the sale into superannuation.
“This will encourage older Australians, where appropriate, to free up homes that no longer meet their needs for younger growing families.”
Simultaneously, first home buyers will be able contribute up to $30,000 into superannuation.
According to the ministers, this means “most first home buyers will be able to accelerate their savings by at least 30 per cent using the scheme”.
“The measures legislated today are part of the Turnbull government’s comprehensive approach to housing affordability,” they continued.
The Treasurer called the incentives a “very significant tax cut” as those first home buyers would be granted the lower rate of tax afforded by putting their money into superannuation.
Speaking at the Association of Superannuation Funds of Australia conference recently, demographer Bernard Salt highlighted a shift in Baby Boomer’s attitudes towards retirement and a corresponding shift in housing and lifestyle desires.
He explained that retirement “now means a work-lifestyle fusion” and that Baby Boomers are set to make retirement “fashionable”.
“Their parents retired, their grandparents retired but they prefer ‘lifestyle change’. So, perhaps we need to start thinking about the ‘lifestyle village’ as opposed to the ‘retirement village’.”
With this in mind, he said Baby Boomers will be assisted in their lifestyle ambitions by the cash liberated by downsizing from the family home.
He identified the top sea change and tree change towns with the over 65 cohorts for downsizing.
These include the NSW Forster-Tuncurry area, the Echuca-Moama region in Victoria and the Queensland Hervey Bay area.
These towns were highlighted for the relative affordability of property compared with capital city properties and the ratio of people aged 65 and older who are not in the workforce.
He also noted that a move from Perth to Albany could free up about $45,000 and a move to the South Australian seaside Victor Harbor-Goolwa could mean an extra $135,000.
With a median house price of $243,000, a move to Ulverstone from Hobart would mean a difference of $167,000.
The FHSSS legislation comes as the Turnbull government announces that Treasury will review the rules that govern the early release of superannuation when it comes to financial hardship and on compassionate grounds.
It will also consider the circumstances under which superannuation assets could be made available to pay compensation to victims of crime.
RELATED ARTICLES
Tax saving
Navigating tax laws for capital gains in 2023
The landscape of Australian tax laws surrounding capital gains is ever-changing, with 2023 being no exception. Read more
Tax saving
What you need to know about the tax implications of crypto
One million Aussies are now invested in crypto, but many have not thought about how these investments will affect them at tax time. Read more
Tax saving
Welfare overhaul could give recipients a leg-up
Australia’s Centrelink recipients who’ve been doing it tough are in for a potentially easier time if the federal government pursues ambitious reforms that could provide sturdier safety nets. Read more
Tax saving
Students should think twice before tapping into their super
Former students might want to think carefully before they look to take advantage of the federal government’s biggest first home buyer incentive. Read more
Tax saving
Advocates call for an end to tax cuts
Social services sector advocates have warned that further tax cuts may make solving Australia’s biggest challenges much harder. Read more
Tax saving
ATO and AUSTRAC may gain new phone-tapping powers
A proposed update to electronic surveillance legislation could see the ATO armed with new powers that would allow the agency to bug phones and intercept online communications. Read more
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. Read more
Tax saving
Navigating tax laws for capital gains in 2023
The landscape of Australian tax laws surrounding capital gains is ever-changing, with 2023 being no exception. Read more
Tax saving
What you need to know about the tax implications of crypto
One million Aussies are now invested in crypto, but many have not thought about how these investments will affect them at tax time. Read more
Tax saving
Welfare overhaul could give recipients a leg-up
Australia’s Centrelink recipients who’ve been doing it tough are in for a potentially easier time if the federal government pursues ambitious reforms that could provide sturdier safety nets. Read more
Tax saving
Students should think twice before tapping into their super
Former students might want to think carefully before they look to take advantage of the federal government’s biggest first home buyer incentive. Read more
Tax saving
Advocates call for an end to tax cuts
Social services sector advocates have warned that further tax cuts may make solving Australia’s biggest challenges much harder. Read more
Tax saving
ATO and AUSTRAC may gain new phone-tapping powers
A proposed update to electronic surveillance legislation could see the ATO armed with new powers that would allow the agency to bug phones and intercept online communications. Read more
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. Read more
More articles
OUR PLATFORMS AND BRANDS
- Accountants Daily
- Accounting Times
- Adviser Innovation
- Australian Aviation
- Broker Daily
- Cyber Daily
- Defence Connect
- Fintech Business
- HR Leader
- Independent Financial Adviser
- Investment Centre
- Investor Daily
- Lawyers Weekly
- Money Management
- Nestegg
- Property Buzz
- Real Estate Business
- Smart Property Investment
- SMSF Adviser
- Space Connect
- Super Review
- The Adviser
- Wellness Daily
- World of Aviation
EVENTS AND SUMMITS
- Accountants Daily 30 Under 30 Awards
- ACE25
- Adviser Innovation Summit
- Australian Accounting Awards
- Australian Aviation Awards
- Australian Broking Awards
- Australian Defence Industry Awards
- Australian Law Awards
- Australian Space Awards
- Australian Space Summit
- Better Business Summit & Awards
- Broker Daily Business Awards
- Corporate Counsel Summit & Awards
- Cyber Security Summit & Awards
- Defence Connect Budget Lunch
- Defence Connect DSR Summit
- Fund Manager of the Year Awards
- ifa Excellence Awards
- ifa Future Forum
- Investor Daily ESG Summit
- Lawyers Weekly 30 Under 30 Awards
- Lawyers Weekly Women in Law Forum
- New Broker Academy
- Partner of the Year Awards
- REB Awards
- Reinnovate
- SME Broker Bootcamp
- SMSF Adviser Technical Day
- Super Fund of the Year Awards
- Women in Finance Awards
- Women in Law Awards
- Accountants Daily Podcast Network
- Australian Aviation Podcast Network
- Broker Daily Podcast Network
- Defence Connect Podcast Network
- HR Leader Podcast Network
- REB Podcast Network
- Relative Return
- Space Connect Podcast
- The Adviser Podcast Network
- The ifa Show
- The Lawyers Weekly Show
- The Smart Property Investment Show
PODCASTS
LEARNING AND EDUCATION
MOMENTUM MARKETS NETWORK
LINKS
STAY CONNECTED
Make your nest egg grow. Register now for nestegg updates.