By Associate Professor Robert Bianchi, Griffith Business School
Owning your own home may become a ‘great Australian pipe dream’ for some first home buyers. The Federal Government can employ a number of policies to improve housing affordability. The crucial question remains how does the government address housing affordability without fueling higher demand?
Overview
The 2017 Federal Budget proposes an initiative to allow first home buyers to accumulate their housing deposit in their superannuation fund. The announcement proposes that potential first-home buyers who make additional deposits above the compulsory 9.5% contribution rate, can accumulate these savings in their super fund. These additional contributions are subject to a lower 15% tax rate (rather than earnings being taxed at their personal marginal tax rate). This initiative attempts to address housing affordability in Australia’s capital cities, especially in Sydney and Melbourne. At face value, this Budget announcement is a novel concept that seeks to address the challenges