Two important measures affecting home owners and buyers.
A few weeks have now passed since the annual budget. Everyone knows that debate continues, unresolved, about the proposed personal and company tax cuts. In such circumstances it is easy to overlook two important initiatives - of vital importance to two groups of home owners – both current and potential.
One such initiative affects older home owners who are considering ”downsizing”. The new measure allows a person (both, even if a home is not owned jointly by a couple) to contribute up to $300,000 (tax free) into their superannuation account from the sale of their family home. That’s up to $600,000 for a couple. There are few rules around this scheme, one being that the property must have been owned for at least 10 years. Leanne Tinyow, the SMSF specialist with Economos Chartered Accountants, has written a comprehensive article on this scheme – which can be read here.
The decision to move out of a family home of many decades will always be confronting and challenging. There are many things to consider – decluttering – financial – timing – what type of property to downsize to - to name just a few. Fortunately, there are emerging specialists who can assist with all of this. We work closely with these consultants to ensure that the whole process is as stress free as possible. One such consultant is Simply Downsize. Click here for more information.
The other important measure affects first home buyers. The First Home Super Saver Scheme was introduced in last year’s budget – but nobody noticed! This scheme allows first home buyers to contribute additional monies to their own Super fund and later access those extra contributions as a deposit on their first home. I really like this scheme for 2 reasons:
Unlike previous schemes – which provided a cash hand-out – this does nothing to artificially inflate property prices. It is well known that when past governments were handing out cash “grants”, all this did was increase property prices by an amount significantly more than the actual amount of the grant.
The first home buyer gets the tax benefits of additional contributions to their super fund. If he/she decides to not buy a property, they still retain a sizable balance in their super account.
Further details of this scheme are available here
The property market in Australia (particularly Sydney) is currently undergoing significant changes. I applaud these 2 new measures which are targeted and do not have a distorting effect on the market generally.