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First Home Owners - Incentive to Save

5 July 2017

Following on from our article last month about stamp duty being abolished on homes for first home owners up to a certain limit, the Federal Government in its recent Budget also established a scheme to help people save for their first home by using their superannuation fund to build savings for a deposit in a tax advantageous environment.

A maximum of $30,000 over two years can be added to a superannuation fund to assist in saving for a deposit.

The tax on this amount and any earnings arising from it is 15% rather than a person’s marginal tax rate. Advantage can also be taken of salary sacrifice arrangements to make these payments before tax (pre-tax).

This will also reduce the marginal tax on remaining income as more is paid to the superannuation fund before tax is incurred. The Government has an online estimator to help people understand the advantages of saving for a home deposit through superannuation at

Empty nester benefits

From July 2018, home owners aged over 65 will be able to contribute up to $300,000 (post-tax) of the proceeds from selling their home to their superannuation fund without affecting their new life time limit of $1.6M.

This measure applies to a principal place of residence held for a minimum of 10 years. Both members of a couple will be able to take advantage of this measure meaning a maximum $600,000 can be contributed to superannuation this way.

This is to assist with the empty nesters syndrome where older people whose children have left home stall from selling their homes as they are concerned that they cannot contribute sale proceeds to their superannuation funds due the caps/limits and other restrictions.

However, any change in a super balance as a result of this measure will count towards the Age Pension assets test.

This article is general information only and should not be relied on without obtaining further specific information.

Author: Linda Alexander

Linda Alexander Business Lawyer / Director

Linda Alexander is a Business Lawyer and acts for clients on a wide range of business law, superannuation, estate planning, family provision and p.. Learn more about Linda Alexander

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