Federal Budget 2017
On Tuesday 9 May 2017, the 2017/18 Federal Budget was released. There are a few proposed initiatives which affect superannuation that you might find interesting:
Housing affordability - first home buyers savings initiative
The Government announced that first home buyers will have the opportunity to save for a deposit through salary sacrificing into their superannuation account from 1 July 2017.
This initiative known as the First Home Super Saver Scheme will mean first home buyers can take advantage of lower tax rates in superannuation while saving for their first house. When it comes time to withdraw, these contributions will be taxed at their marginal tax rate, less a 30% tax offset.
This will only apply to new contributions from 1 July 2017, with the first withdrawals for a home deposit only being made available from 1 July 2018.
Contributions under this new scheme are capped at $30,000 per person and a total of $15,000 per year.
If you are self-employed or your employer does not offer salary sacrifice you can claim a tax deduction on personal contributions, meaning savings effectively come out of before-tax income.
For more details on this measure view the Federal Government's Budget Fact Sheet.
Downsizing the family home - older Australians
If you are over 65 you can make a non-concessional contribution of up to $300,000 to super from the sale of a principal home. For couples that means up to $600,000 that can be contributed to your super through the downsizing cap.
There are special conditions that apply so be sure to view the Federal Government's Budget Fact Sheet for more information.
These budget announcements have not yet been legislated and may be subject to change. We will keep you up to date on any proposed changes.