Super home buyer scheme

[sabre_ac]

"if the Coalition is re-elected on Saturday — would enable first home buyers to use up to 40 per cent of their super, up to $50,000, to put towards buying a home."
"whatever amount is invested will be returned to your super when you sell the home, including the share of the capital gain from the sale of that home"

I don't think it's a good idea for house prices but more importantly, it's very bad for retirement savings.

1. How does the increase in the demand side (increased buying power), without addressing supply to the same degree improve the price escalation situation? (I might be missing the balancing policy).
2. Removing 50k / 40% of someone's super balance without any requirement to replace it could have significant implications in retirement, either a drop in the quality of life or increased government reliance.

Canada has a similar policy, slightly different/better in that you're required to return the withdrawn amount over 15 years, at least then on some level your retirement nest egg (ignoring returns) is somewhat made whole. That said, it's absolutely contributed to increasing prices and resulted in many people owning expensive homes in retirement and completely reliant on government pensions, effectively living in poverty in $2 million homes.

There are certainly people with a better understanding of the tax code out there, but what is to stop wealthy families, from funneling 50k through family members' super accounts to acquire more properties? I'm not sure this benefits those who need help getting into the market.

Every time the government tinkers a little more with the housing market, they increase the incentive for investors (not foreign) to funnel money towards the property market, therefore increasing

 

[BIRDBRAIN]

Desperate act by the libs to pump up the housing market as the great Australian property ponzi looks set to unravel. These schemes are never actually to do with 'helping' first home buyers, they are always to help pump up the market to new highs and make basic shelter even more unaffordable in the future.

 

[Madas]

This is interesting and I’ll add my 2 bobs for what it’s worth .

On the surface using your super sounds like a terrible idea …BUT ….. if it means getting you into the property market sooner rather than later I’m all for it.
A person in their 20’s working for 7-10 years is more likely to be putting away Super than saving for a deposit, so if you just think of it as forced savings for a deposit it makes sense . If they have purchased a property before they turn 30 there is still enough working life to catch up with the super contributions.

Another point is that lots of kids these days invest in shares/crypto anyway, so they are kind of ahead of the game in that regard .Probably much more than us older generation did at there age as the platforms and available information required for trading are so simple and user friendly these days

Finally to the point of will it drive up prices , only if there is a glut of people doing it but I’m not sure if that’s going to be the case .

Unfortunately the government is damned if it does and damned if it doesn’t .

 

[sabre_ac]

This is interesting and I’ll add my 2 bobs for what it’s worth .

On the surface using your super sounds like a terrible idea …BUT ….. if it means getting you into the property market sooner rather than later I’m all for it.
A person in their 20’s working for 7-10 years is more likely to be putting away Super than saving for a deposit, so if you just think of it as forced savings for a deposit it makes sense . If they have purchased a property before they turn 30 there is still enough working life to catch up with the super contributions.

Another point is that lots of kids these days invest in shares/crypto anyway, so they are kind of ahead of the game in that regard .Probably much more than us older generation did at there age as the platforms and available information required for trading are so simple and user friendly these days

Finally to the point of will it drive up prices , only if there is a glut of people doing it but I’m not sure if that’s going to be the case .

Unfortunately the government is damned if it does and damned if it doesn’t .

Some good points there, I'm not in entire agreement but there are plenty of informed people who would be.

1. I agreed with the forced saving concept, I think homeownership is a good piece of a well-rounded financial picture. I'd prefer the government expanded/created a separate savings vehicle and left super alone, which has been one of the few absolute government policy run-away successes.

2. The beauty of super is that it forces long-term retirement planning with the benefit of compounding returns at a rate higher than a bank or in most cases property, taking from this pool to fund a house purchase, which historically over the long term is a lower rate of return and adding the risk of money being spent in depreciable assets (renovation, house bigger than required etc), I believe those who take money out of their super in their 20's will be worse off. (Generally speaking). I do think smart family tax practitioners will find a great way to help wealthy families.

3. I agree, this generation is savvier, I won't touch the crypto comment because I'm not a fan but I'm willing to leave that to a case of each to their own. I'm not sure that the loss of return from the super withdrawal will be compensated by the side investing/trading, though I don't have anything to back this up.

4. If you look at Canada, the uptake to withdraw money from their super equivalent is strong, I think that's a good indicator it'll be taken up in droves in Australia.

5. Agreed, you'll have people shouting at the Government for being active and for sitting on their hands, I'd prefer they sat on their hands but I understand many want them to act. I'd suggest dropping off the capital gains tax exemption but that's very unpopular.

 

[Madas]

Some good points there, I'm not in entire agreement but there are plenty of informed people who would be.

1. I agreed with the forced saving concept, I think homeownership is a good piece of a well-rounded financial picture. I'd prefer the government expanded/created a separate savings vehicle and left super alone, which has been one of the few absolute government policy run-away successes.

2. The beauty of super is that it forces long-term retirement planning with the benefit of compounding returns at a rate higher than a bank or in most cases property, taking from this pool to fund a house purchase, which historically over the long term is a lower rate of return and adding the risk of money being spent in depreciable assets (renovation, house bigger than required etc), I believe those who take money out of their super in their 20's will be worse off. (Generally speaking). I do think smart family tax practitioners will find a great way to help wealthy families.

3. I agree, this generation is savvier, I won't touch the crypto comment because I'm not a fan but I'm willing to leave that to a case of each to their own. I'm not sure that the loss of return from the super withdrawal will be compensated by the side investing/trading, though I don't have anything to back this up.

4. If you look at Canada, the uptake to withdraw money from their super equivalent is strong, I think that's a good indicator it'll be taken up in droves in Australia.

5. Agreed, you'll have people shouting at the Government for being active and for sitting on their hands, I'd prefer they sat on their hands but I understand many want them to act. I'd suggest dropping off the capital gains tax exemption but that's very unpopular.

I’m not sold on it either TBH (and for the record I’m not a big fan of Crypto )
I’d prefer they don’t touch their super but it’s really not as bad as everyone is making out

For example
Many of us self employed people didn’t put away super in our early years but got into property in our twenties.
Hence were able to pay a mortgage instead of rent , take advantage of capital growth , invest in other properties/ shares etc through the created equity etc

Yes we are now playing catch up with Super and have missed the benefits of compounding interest but across the board our financial situation is fine .

Expanding on your idea of another savings vehicle perhaps the government could legislate that the banks create loan packages for home buyers where they are provided an 8-10 % rate of return for a maximum of 10 years encouraging 20 year olds to start saving for the home

Greater minds than mine can do the maths but it’s a thought.

 

[HirdsTheWord]

completely stupid proposal aimed at buying votes from completely stupid people. young people at that.

This policy will;

• Ensure an even more ageing workforce in Australia
• Make retirees even more dependant on the pension.
• Put retirees in greater financial risk after they retire.
• removing large amounts of super will make it not compound with interest.
• makes anyone investing their super more risk adverse to property market crashes and market fluctuations.
• inevitably make housing, even though it will be at lower values even more expensive.

The housing market does not need anymore money or schemes thrown at it. It needs money taken away from it by removing it as a vehicle for investment.

Until investment is addressed any attempt at housing affordability is null and void.

 

[HirdsTheWord]

This is interesting and I’ll add my 2 bobs for what it’s worth .

On the surface using your super sounds like a terrible idea …BUT ….. if it means getting you into the property market sooner rather than later I’m all for it.
A person in their 20’s working for 7-10 years is more likely to be putting away Super than saving for a deposit, so if you just think of it as forced savings for a deposit it makes sense . If they have purchased a property before they turn 30 there is still enough working life to catch up with the super contributions.

Another point is that lots of kids these days invest in shares/crypto anyway, so they are kind of ahead of the game in that regard .Probably much more than us older generation did at there age as the platforms and available information required for trading are so simple and user friendly these days

Finally to the point of will it drive up prices , only if there is a glut of people doing it but I’m not sure if that’s going to be the case .

Unfortunately the government is damned if it does and damned if it doesn’t .

• Getting someone on the property ladder at the expense of their future financial stability is not a good outcome.
• Expecting a first home buyer to buy a house, pay the mortgage & ever increasing cost of living and then do voluntary super contributions is a pipe dream. It will not happen unless wages go up. Which they haven't for 10 years and likely wont for the foreseeable future.
• It will drive prices up, that is not even debatable.
• The government is not damned if does and damned if it doesn't. It is just entirely about who their policy affects. This type of policy shows you exactly who the Government is favoring which is yet again people with existing wealth. Every single policy these dumbasses come up with ensures young people carry the can, this specific policy is asking young people to piss away their super, whilst an investor can buy the same place and claim it as a loss against their income.
• Until investment is seriously looked at in this country. Housing affordability is not going to happen.

 

[burge13]

completely stupid proposal aimed at buying votes from completely stupid people.

Welcome to Politics 101. Is this your first class?

Literally nothing is ever done for the greater good but rather to get re-elected and they are 2 very different things.

All they do is weigh up the numbers. "Canning Policy A would save billions but would cost us votes but spending more is unlikely to cost us any at all". "Ok, raise it 40% Lets get more votes"

Complete and utter waste of time voting or caring about who wins.

 

[HirdsTheWord]

Welcome to Politics 101. Is this your first class?

Literally nothing is ever done for the greater good but rather to get re-elected and they are 2 very different things.

All they do is weigh up the numbers. "Canning Policy A would save billions but would cost us votes but spending more is unlikely to cost us any at all". "Ok, raise it 40% Lets get more votes"

Complete and utter waste of time voting or caring about who wins.

and this is the cycle.

Voters (majority are homeowners) continually repel proper housing affordability policy because they refuse to lose $1 on their house price, as most of them have been conditioned that housing is an investment. So in order to get elected Governments only prop up housing prices.

Until both parties agree to the same policy which actually removes investment form the housing market ergo, not giving voters a choice, its a complete bullshit waste of time argument.

 

[blueboy25]

Why the liberals want to continue to mess with superannuation when it is continually voted in the top 3-5 retirement programs worldwide. Just look at how many people took out $20k during COVID when they didn't really need it and its now going to take years to catch up.

 

[BIRDBRAIN]

Why the liberals want to continue to mess with superannuation when it is continually voted in the top 3-5 retirement programs worldwide. Just look at how many people took out $20k during COVID when they didn't really need it and its now going to take years to catch up.

They hate super because it gives the unions a lot of power with the industry super funds they own. They also love pumping up the housing market, so why not do both at once?

 

[Scotland]

Dud policy.

 

[sabre_ac]

Late to revisit this thread , but does the liberals losing assume this stupid ideas is dead?


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[blueboy25]

Late to revisit this thread , but does the liberals losing assume this stupid ideas is dead?


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Yes