It’s crunch time for First Home Super Saver legislation

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…crunch time for the First Home Super Saver Scheme.

It’s crunch time for the First Home Super Saver Scheme as the consultation period for the draft legislation closed last Friday and federal parliament returned this week. Leading superannuation expert Dixon Advisory, is calling for bipartisan support to pass the legislation, to give certainty to first home buyers that the proposal will be available for use in 2017.

“As property prices on the east coast remain high, first home buyers continue to face immense affordability challenges. Certainty about how to access support is important, to help buyers plan out their finances for the year ahead,” Dixon Advisory’s Head of Advice Nerida Cole said.

“The proposed First Home Super Saver Scheme offers tax concessions for first home buyers, to help them get to their savings target more quickly. For an average wage earner – if they are able to maximise the $30,000 limit over a 2-year period they will have approximately $5,000 more in their pocket to help with the home deposit – compared to saving in their personal name. These extra tax concessions alone won’t be enough to fund a home deposit, but it can help shave time off how long it takes to save a deposit,” Ms Cole said.

“We were pleased to see the draft legislation addressed concerns about fairness, by clarifying that a first home buyer purchasing a home with a partner who has already owned a home, will not be excluded from using the scheme,” Ms Cole said.

The draft legislation proposes more flexibility than the earlier version of the scheme and as Super Guarantee contributions remain inside the super system for retirement, the integrity of the super system is protected. Other key features include:

  • No time limit on the account.
  • Individuals can start saving up to $15,000 per annum from 1 July 2017, up to an overall max $30,000.
  • No need to open a separate account.
  • First withdrawals accessible from 1 July 2018.

Ms Cole also noted the importance of measures to help improve housing affordability, as: “Having a good financial situation in retirement involves much more than just what your super balance is – not owning a home in retirement creates enormous financial stress and instability.”

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