A new bill intended to assist Australians to enter the housing market has passed through both houses in Parliament, increasing the maximum amount of voluntary contributions that can be released via the First Home Super Saver Scheme (FHSSS).
Under the program, users can save money for their first home inside their super, which receives concessional tax treatment. They were able to save up to a maximum of $15,000 per financial year, until they hit an ultimate cap of $30,000.
The new bill, named Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021, has amended the Taxation Administration Act 1953 to increase the contributions maximum from $30,000 to $50,000.
Further, this legislation has also reduced the downsizer contribution eligibility age from 65 to 60. Under the scheme, eligible candidates are able to contribute up to $300,000 from the proceeds of selling their property into their superannuation.
As per Treasury, the shift to downsizer contributions is intended to incentivise more older Australians to sell, “increasing the supply of larger homes for young families”.
Other changes brought about by the bill include removing the threshold that required workers to be paid $450 a month before their employers were obliged to pay superannuation contributions.
The bill has also extended the Morrison government’s temporary full expensing regime by 12 months to 30 June 2023.
This measure was initially announced in the 2020‑21 budget, allowing eligible businesses with aggregated turnover of less than $5 billion to deduct the full cost of eligible depreciable assets in the year they are first used or installed.
The passing of the bill comes following recommendations from industry bodies for further action in addressing housing affordability by expanding first home buyer schemes.
Earlier this month, Real Estate Institute of Australia (REIA) filed its pre-budget 2022 submission, calling for an expansion to First Home Loan Deposit Scheme (FHLDS) and the FHSSS.
REIA president Hayden Groves said of the submission that there was a “need for governments to address both housing supply and affordability for first-home buyers”.
Housing Industry Association’s pre-budget 2022 submission also called for greater investment from the Morrison government in addressing affordability, stating that the FHLDS has “proven to be highly successful” and should be extended.
According to Australian Bureau of Statistics data released at the start of this month, the number of new loans to owner-occupier first home buyers in December had fallen by 21.5 per cent year-on-year.
But while the notion of super being a key for some to enter the housing market is supported by some politicians, including Liberal Party’s MP Tim Wilson and senator Andrew Bragg, not all are convinced that this is the best way forward.
Speaking at an event hosted by PritchittBland Communications in Sydney on 27 January, the federal shadow assistant treasurer and the shadow minister for financial services and superannuation, Stephen Jones MP, suggested that the Morrison government’s was expecting superannuation to “provide so much ballast and support” to a range of issues, including housing affordability.
“I think we’ve had so many snappy answers in the housing space – whether it’s raid your super, or this or that – but when you look at it deeply, [you need] different solutions for different demographics,” Mr Jones said.