The Federal Treasurer, Scott Morrison, announced a scheme where aspiring first home buyers can sock away up to $30,000 in their super fund for a deposit. This means they pay just 15% tax on their contributions, instead of their normal income tax rate. However, the funds need to come from extra savings, not compulsory super payments.
“Anything that helps people save for their first property is good news. But saving within super is not the same as putting money in the bank. It may go up and down from year to year, based on the markets and depending on your asset allocation. So, when you want to access that money, it could be a good year, a bad year or an average year for returns.
“The other thing to remember is that super is set up as a long-term investment. If you’re in your 20s or 30s, your fund assumes it has decades to smooth out returns. After all, you can’t access that money until your preservation age. The question is, will your money have been invested for short-term stability? Probably not,” Mr Bouris said.
Mr Bouris said Australians should get expert advice before they take action.
“Speaking to a financial adviser is one of the best investments you can make. I’ve always said that anyone making a big decision like buying a house should talk to an expert. The same goes for super and investments, where an adviser will help you cut through all the jargon and get your head around new rules like these. They will also make sure you have a clear roadmap for reaching your goals”.
Another Budget measure welcomed by YBR is the ability for over-65s to sell their house and contribute up to $300K of the profit to their super.
“This is a win-win for both young and old. It will boost the number of larger homes on the market – the type that young families are looking for – as well as helping retirees boost their super nest-egg and unlock the equity in their home. It’s good policy.
“However, it will affect people differently, depending on their individual circumstances so it’s best to seek professional advice,” Mr Bouris said.
YBR questions the wisdom of the new bank levy, warning it could drive up loan costs.
“There are already forces at work that are increasing the cost of a mortgage, including increased pressure from regulators. Slapping another tax on banks will add even more pressure. We won’t be surprised to see this passed onto the customer in the form of higher interest rates.
“However, Yellow Brick Road has the benefit of multiple funding lines so we are confident we can continue to offer our customers true value when it comes to borrowing,” Mr Bouris said.
Belinda White, External Communications Manager
T 02 8226 8238 M 0421 193 668
E firstname.lastname@example.org W www.ybr.com.au