Legislation introduced for Budget housing affordability measures – September 2017
Legislation to implement the housing affordability package announced in the Budget has been introduced in federal Parliament.
The legislation would enable prospective first home buyers to save for a deposit inside superannuation through the First Home Super Saver Scheme (FHSSS); allow older Australians to contribute the proceeds of the sale of their family home to superannuation; better target deductions relating to residential investment properties; and boost the availability of rental accommodation in the market.
Treasurer Scott Morrison said the FHSSS would be a game changer for young Australians trying to get their first place.
“Individuals can contribute up to $30,000 (up to $15,000 a year within existing caps) into superannuation and will be able to withdraw the contributions from 1 July 2018,” he said.
“These contributions, along with deemed earnings, can be withdrawn for a deposit with withdrawals taxed at a marginal tax rate less a 30 per cent offset.”
He said the downsizing measure would allow older Australians to contribute proceeds from the sale of their family home into their superannuation accounts. “Many older Australians will be attracted to take up this concession and in so doing vacate larger properties which no longer suit their needs.
“From 1 July 2018, people aged over 65 will be able to make an additional non-concessional contribution of up to $300,000 into superannuation when they sell their home which they’ve held for at least ten years.
“Both members of a couple could take advantage of this measure, meaning up to $600,000 of contributions may be made by a couple from the proceeds of selling their home.”
Mr Morrison said the housing integrity measure would restore integrity to the tax treatment of residential investment properties. The Government would disallow claims for travel expense deductions and limit plant and equipment depreciation deductions to new assets only.
He said the Government would implement an annual vacancy charge on foreign owners of residential real estate where property is not occupied or genuinely available on the rental market for at least six months in a 12-month period.
“The vacancy charge builds on the Government’s existing foreign investment regime to increase the number of houses available to live in.
“The charge provides a financial incentive for the foreign owner to make their property available on the rental market.
“The vacancy charge applies to foreign persons who make a foreign investment application for residential property from 7:30PM (AEST) on 9 May 2017.”