Last night, the Liberal Party launched its Federal Election campaign in Brisbane, unveiling two new housing policies to help people buy homes if they are re-elected.
First is an extension of the existing superannuation tax incentive, which allows Australians aged over 65 to sell their homes and invest an extra $300,000 per person into their super.
This will now be extended to those over 55.
Second is the proposal to allow first-homebuyers to use their superannuation (up to 40 per cent, or $50,000) to do so.
Speaking at the Brisbane launch, Prime Minister Scott Morrison said he hoped this would increase supply by increasing opportunities to downsize and increasing the supply of family housing stock in the market.
“Currently, when older Australians sell their home, the sale proceeds are also exempt from the pension assets test for one year.
“And from 1 January 2023, we will double that.”
The PM also said he hoped this would give seniors more time to plan and help them look to downsize while maintaining their pension.
For first home buyers, the PM acknowledged the difficulty in saving for a deposit.
“This is why a re-elected Coalition government will allow first home buyers to invest a responsible portion of their own superannuation savings into their first home.”
Under the proposal, first home buyers will be able to take up to $50,000 or 40 per cent of their superannuation savings to spend on their first home.
The REIQ has commended both parties for launching initiatives aimed at helping first home buyers break into ownership and improve housing access for young families.
CEO Antonia Mercorella said the Coalition’s housing initiatives announced last night demonstrated an innovative approach and were welcome additions to the Coalition’s election campaign.
“This initiative will help older Australians to invest in their superannuation and improve their future financial security while freeing up housing stock for younger, growing Australian families.
“It’s a win-win for everyone,” Ms Mercorella said.
Under Labor’s ‘Help to Buy’ policy, the ALP will fund up to 40 per cent of the price for a new home and up to 30 per cent for an existing home for first home buyers.
The scheme will be open to 10,000 Australians each year.
“The Help to Buy scheme will enable first home buyers to realise their dream of ownership much faster because a smaller deposit will be required, while other benefits include lower mortgage repayments ongoing,” said Ms Mercorella.
Property Council Chief Executive Ken Morrison said helping older Australians find more suitable homes made sense. Still, he says housing supply remains a pressing need, and all governments require more action on the issue.
“We know many older Australians face barriers to ‘right-sizing’ their housing. These announcements will help people move to a home or a purpose-built age-friendly community that serves their needs better,” Mr Morrison said.
“The measures would also free up larger housing for younger, growing families.
The Property Council has once again called for more focus from policymakers – at all levels of government – on the need for solutions to Australia’s housing supply challenges.
“The Government’s own official forecasts predict that housing supply is set to drop by around 35 per cent right when population growth is resuming, with the National Housing Finance and Investment Corporation forecasting that by 2032 Australia will be 163,400 homes short of demand.
“Falling supply and growing demand is a dangerous position for housing affordability.
“While targeted demand-side policies to support aspiring homebuyers are welcome, a supply crunch is coming. This needs to be the focus for whoever wins government next Saturday,” he said.
Not everyone agrees that accessing super early for first homebuyers is a good move.
According to the latest detailed modelling conducted by a McKell Institute report, Scott Morrison’s plan to allow people to spend their superannuation savings on a home deposit would reignite a housing price explosion, increase household debt, and deplete retirement savings.
Shadow Housing Minister Jason Clare also said Labor wouldn’t support the super home buyer scheme, adding, “You shouldn’t have to raid your super to buy a home.”
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