The Federal Parliament has passed a new legislation that aims to help Australians get into their first home. The bill expands upon the measures announced in May 2021 Federal Budget, which will apply from 1 July 2022.
Key details of the Bill include:
- Increasing the maximum realisable savings in a First Home Super Saver Scheme (FHSSS) account from $30,000 to $50,000.
- Reducing the age from which one can make downsizer contributions to their superannuation fund, from the sale proceeds of their home to 60.
- Removing the minimum monthly threshold for superannuation guarantee (SG) contributions. This means that even where an eligible employee earns less than $450 in a calendar month, there is now an obligation on the employer to make SG contributions.
- Removal of the work test for non-concessional (NCCs) and salary sacrifices made by individuals less than 75 years of age.
- Extending the bring-forward age limit from 67 to 75 years of age, which means that many individuals aged 67 to 74 years of age can now bring forward NCCs cap amounts.
By increasing the cap on the First Home Super Saver Scheme (FHSSS), Australians are able to lessen their taxes paid as superannuation is only taxed at 15%, whereas most regular income is taxed from 30% to 45%.
The bill will also reduce the eligibility age for making downsizer contributions into superannuation. This allows a larger proportion of older Australians to consider downsizing to locales that are better suited to their needs, and consequently increases the supply of larger homes for young families.
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