As I write this, the federal budget has recently been handed down. Several measures were announced which will have a significant impact for housing.
- Sellers of new developments will only be able to sell a maximum of half their properties to foreign buyers. This cap should ensure an increase in supply for “Australian” buyers. This restriction is now in place.
- First-home buyers will be able to “salary sacrifice” for a deposit from pre-tax pay. This money (to a maximum of $30,000) would be deposited to a superannuation fund, and can later be withdrawn for a home deposit. This will be in place from July 1, 2017.
- Also from July 1, 2017 retirees, or those aged over 65, who sell their family home which they have owned for ten years or more in order to downsize, will be able to make a non-concessional contribution of up to $300,000 of the sale proceeds into superannuation.
It is expected that this incentive will increase the number of larger homes on the market, therefore enabling more younger families to move into houses rather than units.
- An “empty home” or “vacancy” tax will be applied to properties owned by foreign investors who allow their property to remain vacant for more than six months. This annual charge will be at least $5,000 and it is expected that this levy will result in more homes being offered to the rental market.
- Foreign investors will no longer be able to claim the capital gains tax exemption for their main residence.
- For investment in affordable housing, the capital gains tax discount will be increased to 60%.
It will be interesting to see whether these measures will improve housing affordability because, as the government budget fact sheet says, “access to secure and affordable housing has significant economic and social benefits.”
Only time will tell as to the impact these strategies will have on the market, however we believe they are a step in the right direction in providing more people with affordable housing options in the future.
WRITTEN BY: Julie Rodgers, Director
Turramurra North Real Estate
DISCLAIMER: We have, in preparing this information, used our best endeavours to ensure that it is true and accurate. It is gathered from sources we believe are reliable, however, we cannot guarantee its accuracy and interested persons should rely on their own inquiries.