One would have thought that we have had enough changes to superannuation for the next decade. Well not quite. The Budget contained further changes that all centre around housing affordability. The two changes of note are as follows:
1. Superannuation Contributions if you Downsize
A person aged 65 or over will be able to make a non concessional contribution to superannuation of up to $300,000 from the proceeds of selling their home from 1 July 2018. Amazingly this change will be exempt from the existing age test, work test and the $1.6m Total Superannuation Balance test.
You will be able to access this non concessional contribution measure if you sell your principal residence that you have owned for at least 10 years. You and your spouse/partner can each put in up to the maximum $300,000 limit. Presumably this will be a lifetime cap.
2. First Home Saver & Superannuation
The Government announced that first home buyers will be able to salary sacrifice up to $15,000 per annum or $30,000 in total and then withdraw that money from their superannuation fund to assist with funding the deposit on their first home. This measure will commence from 1 July 2017. In making these additional contributions taxpayers must still remain within their annual concessional contribution caps (being $25,000 inclusive of compulsory employer superannuation contributions and salary sacrifice contributions). Withdrawals from these salary sacrifice components will be allowed from 1 July 2018.
When a first home buyer withdraws this money the amount will be taxed at their marginal tax rate less a 30% tax offset.
If you would like further information about how the Federal Budget will impact your superannuation please contact the office 03 9629 1433