Soon, it may be possible for first homebuyers to tap into their superannuation to help fund the deposit for their very first home.
The concept is currently being ‘considered’ by the Government, and is loosely based on a Canadian scheme called Home Buyer’s Plan that allows first homebuyers to access up to $25,000 from their super fund, tax free, to help fund their first home purchase. The money must be paid back to the super fund within 15 years or the balance owed is taxed at the top marginal rate.
Before first homebuyers start jumping for joy, you’ve got to ask what the likelihood of its introduction is and my bet is, it won’t happen.
Whilst the concept is interesting and certainly aims to stir up the conversation on housing affordability in Australia – which is certainly required – I believe ‘throwing more money’ at the issue will actually have a counter effect. The more first homebuyers in the market, the higher house prices will go (as per the First Home Buyers Grant impact).
Then of course there is the issue of paying back the money down the track (when you are already plugging away at the mortgage repayments) or being hit with an additional tax bill.
Getting into your first home in today’s marketplace isn’t impossible but it does require smart planning and saving. And with home loan interest rates at their lowest in decades now is a good time to consider your purchasing options.
If you need more information on how much you can borrow for your first home, an overview of your deposit options or assistance with getting your first home savings plan in place our home finance specialists can help, contact:
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