Federal Budget 2017 update
Tuesday, 16 May 2017
The Federal Government’s 2017-18 budget proposed some initiatives to assist first home buyers and people wanting to downsize. We’ve summarised the key aspects of these two proposals below. It’s important to note that at this stage they are just proposals which could change when legislation is passed through Parliament.
First home buyers
The Government has proposed a ‘First Home Super Saver Scheme (FHSSS)’ which is designed to support first home buyers to save extra money for a deposit, by investing via their superannuation.
From 1 July 2017 under this scheme:
- Members would be able to make voluntary contributions of up to $15,000 per year into super, (with a $30,000 total limit) to help save for a deposit.
- These contributions, along with earnings would be taxed at 15%.
- Members could withdraw these funds to put towards a home deposit from 1 July 2018.
- These funds would be taxed at the marginal tax rate less a 30% offset when paid to the member.
- The FHSSS is proposed to be administered by the ATO, who will also determine the amount which can be released from a member’s super account.
For information about how to make voluntary contributions, or assistance with how much you may want to put into your super account from 1 July, contact your local Member Services Manager or call our Member Hotline on 1800 680 627.
Another key proposal in the budget was an initiative to provide greater flexibility around contributing earnings made from selling the family home towards super.
From 1 July 2017 under this proposal:
- Members aged 65 and over would be able to make a non-concessional (after-tax) contribution into their super of up to $300,000 from the proceeds of selling their home.
- Existing contribution rules for members aged 65 and older and restrictions on balances above $1.6 million will not apply to contributions made under this new downsizing cap.
- Both members of a couple will be able to take advantage of this measure for the same home, meaning $600,000 per couple can be contributed to super through the downsizing cap.
* Please note, it only applies to houses that have been the principal place of residence for a minimum of 10 years.
For more information about how these changes may impact you, call our Member Hotline on 1800 680 627 and if necessary, we can organise a time to meet with a Financial Adviser. Alternatively, please refer to the ATO Factsheet.
For further information around these announcements, or for other changes that will be effective from 1 July 2017, please refer to http://budget.gov.au/
The information contained in this article is general information only and does not take into account your individual investment objectives, financial circumstances or needs. You should not rely on this information as a substitute for professional advice.