Superannuation for First Home Buyers: You May Able to Dip into Super for Your First Home
Superannuation for First Home Buyers: Should young Australians be able to draw on their super savings to get into their first home?
Months after we first looked at this topic, Australia’s Treasurer Joe Hockey announced that he would consider allowing first home buyers to dip into their superannuation funds to get into their own home.
There are calls from the new home building industry for first home buyers to be allowed to draw on superannuation savings for a new home deposit, allowing more young Australian’s to build and own their own home.
The possibility of first home buyers using superannuation savings is now on the cards, with South Australian Federal Senator Nick Xenophon pushing a debate on the issue.
Xenophon said a potential ‘superannuation for first home buyers scheme’ would be similar to a program currently running for first home owners in Canada, allowing up to $25,000 to be borrowed from superannuation savings for a first home deposit.
“With more and more Australians finding it difficult to break into home ownership, adopting the Canadian scheme would make a difference to many thousands of Australians each year,” the Senator told The Advertiser.
The news came the day after the Housing Industry Association of Australia called on the government to allow young families use their superannuation savings to accumulate a deposit for a first home.
The HIA says that since superannuation is essentially a form of forced savings – it should only make sense that potential first home buyers and builders should be able to draw on these savings as a way to get into home ownership, as long as the money is paid back in the medium term.
“Superannuation contributions are a form of forced savings for people – to support them in their retirement,” said Graham Wolfe, HIA’s Executive Director, Industry Policy and Media said in a press release this week.
The HIA noted that getting young people into their first home delivers the same result as superannuation is intended for, to allow Australians to eventually reture without relying on government welfare.
“Owning a home delivers the same result, but with the added benefits arising from home ownership throughout their working lives. Many young people are busy working, renting, repaying their education costs and in many instances, raising a family,” said Mr Wolfe. “Saving for a deposit at the same time is a significant challenge.”
“By enabling access to a portion of their superannuation savings, many aspirational first home buyers would be able to accumulate a deposit, secure home ownership sooner and redirect their rental payments to their own future financial security,” Wolfe added.
“Accessing superannuation for a home deposit would provide temporary access to their personal savings. Provided it was repaid to their superannuation accounts over a period of time, similar to university HECS repayments, their retirement savings would be assured,” said Mr Wolfe.
“HIA urges all stakeholders to support measures aimed at improving access to home ownership for first home buyers, including assistance in breaching the deposit gap”, concluded Mr Wolfe.
Related articles: Saving for a first home deposit.