In the 2017-18 Federal Budget, a couple of measures were introduced in an effort to reduce housing affordability - the ‘First Home Super Saver Scheme’ and ‘Contributing the proceeds of downsizing into superannuation’ measure. Both of these schemes have now been passed into law. So what do they mean and how can you benefit from these?
First Home Super Saver Scheme
The rationale behind this scheme was to allow home buyers to save money faster by utilising the concessional tax treatment inside super to save for their first home. It encourages first home buyers to make superannuation contributions and then apply to release the contributions and associated earnings (to a maximum of $15,000 in a financial year) to help purchase a home.
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Please be aware that eligibility conditions apply and we recommend seeking financial advice prior to making any decisions regarding superannuation.
Contributing the proceeds of downsizing into superannuation
From 1 July 2018 the Contributing the proceeds of downsizing into superannuation measure will come into effect. Essentially, if you are over the age of 65, and sell a property that was your main residence at some time (even if it is not your main residence at the time of sale), then you may be eligible to contribute up to $300,000 from the proceeds of this sale to superannuation. This limit is in addition to the general superannuation contribution limits.
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Again, we do recommend that you seek financial advice prior to making any decision regarding the sale of your home or superannuation contributions. You will also need to be mindful of any potential ramifications this may have to your Centrelink or DVA entitlements so please consult a professional to discuss your personal situation and whether this would be suitable for you.
If you have any questions regarding either of these initiatives, please do not hesitate to contact our office.