The biggest news in Tuesday’s Federal Budget outcome was to encourage retirees over the age of 65 to downsize their homes and contribute towards the new superannuation scheme.
As they are planning to provide extending access to the retirees to free up more houses so that the young generation and families can take benefit of this new scheme and work towards their homeownership.
According to Treasurer Josh Frydenberg, “The budget has a post-pandemic economic recovery focus, with job creation, rebuilding the economy and enhancing women’s economic security at the heart of many of the announced measures”.
“We will allow those aged over 60 to contribute up to 300,000 into their superannuation, if they downsize their home, freeing up more housing stock for younger families”, he said.
Downsizes Contribution Open to over 65s
- Effective from July 2022 People will be able to contribute up to $300,000 or $600,000 for couples from the sales of the home into their super.
- 65 and over can take benefit of this scheme as this won’t count towards the concessional and non-concessional contribution caps.
Single parents will be more benefited.
Great news for single parents, now they would be able to purchase a house with a deposit as low as 2%. The “Family Home Guarantee” scheme provides a huge relief to single parents with dependents. They don’t have to be first home buyers, but they shouldn’t own the property before applying for the scheme.
According to ACOSS CEO Cassandra Goldie, “the scheme will not help the one in three single parents, mainly women, living in poverty”.
“This measure will do nothing to help these women and their children as they struggle to get by day to day, just trying to keep any kind of roof overhead”, she added.
Expansion of First Home Loan Deposit Scheme.
The intro of first home buyers in October 2020 was a huge success. Now the government has opened a new 10,000 places for 2021 – 2022 for first home buyers to take advantage of building or purchasing a new house and that will be effective from 1 July 2022.
- First home buyers can take benefits of deposit as low as 5% and the rest of the other 15% is being guaranteed by the government towards their homeownership.
- There will be an extension of voluntary contribution from $30,000, now the maximum amount you can save under the same scheme is $50,000 for individuals, a huge jump of $20,000 in their savings.
Boost to Infrastructure.
There is an addition of $15.2 billion in infrastructure, which will bring the overall project cost to $110 billion over the next decade.
There is a $2.6 billion project outline in South Australia for the north-south corridor.
This will boost employment creating jobs in infrastructure and will rise the housing demand and provide improvement for residents and workers with long-term competence and yield.
There were key takes outs from the budget that was remain untackled.
Allowing more saving capacity for First home Buyers will not change the basic fundamentals of housing affordability, resulting in it will increase the prices and more debts.
According to Shane Oliver, “the housing measure continues to focus more on boosting demand rather than supply”.
“Boosting housing supply, winding back property investors tx incentives, and removing stamp duty is the better way to tackle housing affordability”, he said.
To learn more about: Federal Budget 2021 – 2022