FIRST-HOME buyers and seniors received a boost in the 2017-18 Federal Budget, while investors have had their benefits reduced.
People looking to save a deposit for their first home will be able to make voluntary contributions to their superannuation that will be taxed at 15 per cent instead of marginal rates.
Up to $15,000 can be contributed in a year, to a cumulative maximum of $30,000.
A first-home buyer couple will be able to save up to $30,000 per year, to a maximum of $60,000.
Contribution can be made from July and, from July 2018, first-home buyers will be able to access their funds at any time to help with their house purchase.
REIWA has welcomed these measures.
“This is a fair and sensible budget that is set to encourage growth in the economy,” president Hayden Groves said.
“The emphasis on housing affordability is long overdue, and we’re pleased the Government is driving policy to improve housing outcomes by helping first-home buyers salary sacrifice a proportion of their pre-tax income.”
The Budget also encourages Australians over 65 years to downsize by making a non-concessional contribution of up to $300,000 into their superannuation fund from the proceeds of the sale of their principal place of residence.
The aim is to encourage downsizing, freeing up larger homes for younger, growing families.
This measure will take effect from July 1, 2018.
While conceding this is a positive step, REIWA will continue to advocate for a reform for stamp duty concessions for seniors looking to “right size”.
On the other hand, investors will face reduced tax concessions.
From July 1, they will no longer be able to claim deductions for travel expenses related to inspecting, maintaining or collecting rent for a residential rental property.
There will also be changes to depreciation deductions.
Investors who purchase plant and equipment for their residential investment property after May 9 will still be able to claim a deduction over the effective life of the asset.
However, subsequent owners of a property will be unable to claim deductions for plant and equipment purchased by a previous owner of that property.
Foreign owners of residential property will be charged a levy if they fail to occupy or lease their property for at least six months of the year.
This measure is intended to encourage foreign owners of residential property to make their properties available for rent where they are not used as a residence and so increase the number of dwellings available for Australians to live in.
There will also be changes to capital gains tax for foreign and temporary tax residents.
Foreign investment will be limited, with developers to be prevented from selling more than 50 per cent of new developments to foreign investors.
Mr Groves expressed disappointment in these measures.
“Foreign investment in WA represents a very small proportion of our local market,” he said.
“These policies will only further dampen an already subdued housing market and deter foreigners who are not permanent residents to locate and live in WA.”