Federal Budget gives seniors and first homebuyers a helping hand

Through the recently released Federal Budget, the Morrison Government announced a host of changes to incentives relating to homeownership for both new homeowners and elderly who are considering downsizing.

With an optimistic property outlook, the Western Australian housing market is said to benefit immensely, according to Property Council of Australia WA Executive Director Sandra Brewer.

“WA’s housing market optimism is stronger than it has been and there are higher levels of demand for property than we have ever seen,” she said.

“Incentivising rightsizing by allowing older Australians to make additional superannuation contributions through the introduced changes will free up larger properties, whilst also driving demand for smaller homes, apartments and specialist retirement markets.”

Under the new changes, Australians over the age of 60 will be able to make a one-off payment, post-tax contribution of up to $300,000 per person to their super when they sell their home.

The motive behind this was designed to enable empty nesters an additional motivation to downsize to a home which better suits their needs and free up stock of larger homes for families.

According to figures obtained from the federal treasury, around 22,000 individuals have made a downsizer contribution since its inception in July 2018.

“Helping just a fraction more seniors to rightsize their property will match retirees to homes that better suit their lifestyles and needs,” Ms Brewer said. “This impact will also free up housing for families in existing suburbs.”

With rightsizing being critical for seniors, not only will this incentive help meet the housing aspirations of older Australians who no longer need to live in large family homes, it will also help those who wish to remain in the communities they love.

“We know rightsizing – whether that’s to an apartment or retirement living village – can enable older Australians to age well in place, rather than potentially moving prematurely into aged care,” Ms Brewer said.

With demand for generously sized four-bedroom, two-bathroom properties at an all-time high, this is considered welcoming news.

Coupled with the alterations to the downsizer benefit payment, the Federal Budget also announced an expansion of the First Home Super Saver Scheme and the First Home Loan Deposit Scheme, as well as an increase to the Family Home Guarantee.

According to Federal Housing Minister Michael Sukkar, the additional 10,000 places proposed for the First Home Loan Deposit Scheme will allow even more Australians a chance to get into their first home.

“The places were introduced for first homebuyers seeking to build a new home or purchase a newly built home,” he said.

“This will essentially allow buyers to purchase a property with a five per cent deposit.”

In addition to this, the budget outlined the Federal Government’s plans to expand the First Home Super Saver Scheme, which Mr Sukkar outlined as influential in getting undetermined buyers over the line.

“This ensures young Australians can achieve the dream of homeownership by increasing the maximum amount of voluntary contributions to $50,000,” he said.

In support of this, Ms Brewer outlined that these introduced changes would result in increased growth.

“These initiatives will enable the residential sector to continue to drive Australia’s economic recovery,” she said.

The Family Home Guarantee was also another major scheme which was highlighted in the recent budget, with Mr Sukkar commenting on how it would help more single-parent families get into the housing market.

“Ten thousand additional guarantees will be made to single parents with dependants who have struggled to save for a first home deposit,” he said.

The scheme recognised the challenge of saving for a deposit for those on a single income and raising children.

“The result of the scheme will allow these people to purchase a home sooner, with an upfront deposit of as little as two per cent,” Mr Sukkar said.

Ms Brewer said she felt the changes would encourage a broad range of Australians to get into the home market sooner.

“The extension of the New Home Guarantee, an increase to the maximum voluntary contributions under the First Home Super Saver Scheme and the new Family Home Guarantee will all have a positive impact on the housing market,” she said.

“These schemes are specifically targeted to help first homebuyers bridge the deposit gap and bring the aspiration of homeownership within reach of a broader range of Australians.

“The initiatives outlined will provide positive pathways for downsizers and Australians who aspire to homeownership but have struggled to meet deposit requirements.”

With the number of first homebuyers at its highest level in nearly 15 years, these changes are set to come into effect from July 1.