2017 Federal Budget Changes to Housing
The 2017-2018 federal budget has been announced and will roll-out on the 1st of July this year. This has meant some significant changes to housing, here are our top 5.
What are the 2017 Federal Budget Changes to Housing?
First Home Super Saver Scheme
If you are a first home buyer then this change is significant for you. Simply, this scheme means first-home buyers can leverage the tax incentives of superannuation to save for their home.
Simply, first-timers will have the ability to put $15 000 or less each year of their income into superannuation. This can be withdrawn later as part of a home purchase. This means they can leverage tax-free superannuation to save for their home.
Tax on Underutilised Property
As part of the 2017 federal budget changes to housing, the government are imposing a tax on homes owned by foreigners. This is on home which has been vacant for more than 6 months. The fee for this is quite hefty, up to a few thousand dollars, and is meant to get more unused properties on the market.
This is happening in the face of a housing affordability crisis that seems to be spreading in Australia. Underutilised properties are an ineffective use of the residential property in Australia.
Foreigners Limited to 50%
Another part of the 2017 federal budget changes to housing is the restriction on overseas buyers into new developments. This limitation means that a maximum of 50% of a new development property can be sold to international buyers.
This increases the supply of development investment available to Australians. This could limit Australia’s competitiveness in this realm, but we will have to see how it plays out to know if it is an effective change.
Once again, the government are leveraging the tax-free element of superannuation to incentivise changes in the market. Similar to point 1, if those aged 65+ choose to sell a home they have been in for 10+ years they will be granted the ability to put up to $300 000 of that sale into their superannuation.
The idea behind this is to create the frictional incentive for people to consistently be moving to homes that fit them, rather than underutilising larger homes.
Removed Tax Deductions for Investment Property Travel
The government used to subsidise travel expenses for individuals travelling to inspect, collect rent or maintain their investment properties. This has been removed from the budget as of July 1st. This will mean a large increase ($540 million) to the budget, which can help to offset some of the new incentives.
Hopefully this review of the 2017 federal budget changes to housing has helped you.
If you are planning to sell your home, please take a look at this crucial article: How to Sell a House in Canberra