Help for first-home buyers and single parents to own a home and continuation of an income tax break for low and middle income workers are among key measures that will put more cash in the pockets of Australians following the 2021-22 federal budget.
There is an the increase in the First Home Buyer Super Saver Scheme to a maximum of $50,000, up from $30,000, that can be withdrawn from superannuation to put towards a house deposit. The increase comes into effect on July 1, 2022.
There are annual contribution caps to how much can be made in voluntary contributions that have to be saved in super first, under the scheme, before the money can be withdrawn.
Pension loan scheme
There are changes to the Pension Loan Scheme which allows almost anyone who owns a property and has reached pension age to take out a “reverse mortgage” from the government, where the balance of the loan is repaid when the property is sold.
The scheme pays an income up to an amount that is equal to the maximum age pension.
Under changes that come into effect from July 1, 2022, up to 50 per cent of the maximum annual age pension can be accessed as a lump sum each year. The total amount accessible under the scheme has not changed.
“[The change] is important as it could allow older Australians to access the capital in their home to pay for large, one-off items, such as medical services or home repairs, which they may not otherwise be able to afford,” says Colonial First State general manager Kelly Power.
Downsizer contribution
To help free-up homes for younger families, from July 1, 2022, those aged at least 60 will be able to make a one-off contribution of up to $300,000 per person, or $600,000 per couple, to their super when they sell a home that they have owned for at least 10 years. The qualifying age is currently 65.
Jason Murray, chief of member experience at QSuper, says the downsizer contribution allows retirees to move to more suitable housing as their family size drops and to turn the capital tied up in their home into retirement income.
Family Home Guarantee
The newly introduced Family Home Guarantee (FHG) allows single parents with a maximum annual income of $125,000 to purchase a new or existing home with a minimum deposit of 2 per cent. It is available for property purchases of up to $700,000 in Sydney and $600,000 in Melbourne.
The scheme is limited to 10,000 places over four years; though, if the uptake is strong, the government could well add more places. The scheme starts on July 1.
Eliza Owen, head of research Australia at CoreLogic, says single parent households are largely headed by women, making up about 64 per cent of lone parent and lone-adult households.
“As a result, this policy may contribute toward narrowing the gender wealth gap,” she says.
Andrew Wilson, consultant economist at Archistar, estimates a single parent earning $125,000 using the FHG would be able to borrow about $500,000 at current interest rates to purchase a home.
However, that will still leave them with few options to purchase appropriate family friendly homes in Sydney and Melbourne, where prices are booming, Dr Wilson says.
New Home Guarantee
The government has also extended and renamed a scheme where first-home buyers with a maximum income for couples of $200,000 can purchase a home with a deposit of just 5 per cent.
The price ceilings for the New Home Guarantee are $950,000 in Sydney and $850,000 in Melbourne, with 10,000 places becoming available from July 1 to those seeking to build a new home or purchase a newly built home.
Dr Wilson says the measures to assist first-home buyers are a bit “ho-hum”, given recent rocketing property prices. “They are narrowly targeted and are unlikely to significantly stem an ongoing decline in activity from first-home buyers”, Dr Wilson says.
“Increasing activity from investors and rising property prices are likely to see first-home buyer activity fall by 20 per cent next year, and that is assuming full uptake of the schemes announced in the budget”, he says.
Tax relief
Tax relief will be extended for another year from July 1, in the form of retention of the Low and Middle Income Tax Offset. It is worth a maximum of $1080 for individuals and $2160 for couples, with the main benefits going to those earning between $48,000 and $90,000 a year.
The budget confirmed the current $10,560 cap on the childcare subsidy will be removed.
Families with two or more children aged 5 and under will receive an increase of up to 30 percentage points in the subsidy for their second and later children up to a maximum of 95 per cent of fees paid.
Article Source: www.brisbanetimes.com.au
from Queensland Property Investor https://ift.tt/33H0a6C
via IFTTT
