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.

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.

 

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Reference: https://www.nestegg.com.au/tax/11263-superannuation-downsizing-measures-to-become-reality?utm_source=Nestegg&utm_campaign=11_12_17&utm_medium=email&utm_content=1