In its 2019-2020 pre-budget submission to the Commonwealth government, the Real Estate Institute of Australia has renewed its call for an expansion of the federal government’s First Home Super Saver Scheme (FHSSS).
The FHSSS enables individuals to contribute a total of $30,000 (and a maximum of $15,000 a year within existing caps) into their superannuation in a bid to assist them in saving for a deposit for their first home.
However, the REIA has said that the scheme does not go far enough in addressing the “acute issue” of housing affordability, with the FHSSS limiting access to withdraw voluntary contributions made to super after 1 July 2017 for a home deposit.
The property investment group noted the benefits of sustaining high ownership rates as a form of wealth creation, stating that while superannuation is an important financial asset to households, more emphasis should be placed on supporting the entry of Australians into the property market.
“Too much attention has been focused on the accumulation of a nest egg through superannuation at the expense of other more practical considerations, which not only improve the quality of life at an earlier age but result in a greater retirement ‘nest egg’,” the REIA stated.
As such, the REIA has recommended that the government allow access to voluntary contributions to superannuation funds made prior to 1 July 2017, which the group said would help prospective buyers to “save for a deposit faster”.
“The use of retirement savings for a first home purchase has already proven to be successful in Canada, New Zealand and Singapore,” the REIA added.
Other recommendations proposed by REIA in its pre-budget submission include:
- The coordination of a consultation process involving all levels of government to address property taxation
- The retention of existing negative gearing and capital gains taxes
- The appointment of a minister for property services
The federal government is expected to hand down its 2019-20 budget in April.
[Related: Housing affordability debate intensifies]