Housing Affordability Tax Measures

Recently, legislation has been introduced to Parliament for a number of housing affordability tax measures.

One measure is the First Home Super Saver Scheme (FHSSS) which will encourage first homebuyers to ‘build a deposit inside their superannuation fund.

Voluntary super contributions of up to $15,000 per year, and $30,000 in total can be contributed from 1 July 2017.  These contributions can then be withdrawn, along with earnings, for a first home deposit, from 1 July 2017 onwards.  This will give them the capacity to save in a tax effective environment.

Another measure will be to disallow deductions for travel expenses relating to inspecting, maintaining or collecting rent for a residential rental property.  It is also proposed to limit the depreciation deduction on properties purchased after 9 May 2017.  These measures will take affect from 1 July 2017.

It is believed that these measures go against the fundamental right of being able to claim an expense against the revenue.

It is proposed to introduce a foreign resident vacancy levy, which will place an annual charge on foreign residential property owners if their property is not occupied or available on the rental market for at least six months in a 12-month period.

Finally, a downsizing measure will be introduced from 1 July 2018, which will allow individuals aged 65 or over to contribute proceeds from the sale of their family home into superannuation.  A non-concessional contribution of up to $300,000 will be allowed in addition to the contributions allowed under the existing rules and caps and they will be exempt from the existing age test, work test and the $1.6 million balance test.