Federal Budget 2017/18

As you may know, the Treasurer Scott Morrison delivered the Federal Budget on 9 May 2017. The government was clear to point out the budget was to deliver on fairness, security and opportunity. Unlike last year’s budget, there were only a few changes to super this year.

1. Encouraging savings for first time home buyers through superannuation

From 1 July 2017, members can add to their super account through salary sacrifice (above the normal compulsory contributions) to save for their first home. These additional contributions and earnings are allowed to be withdrawn from 1 July 2018 for their home deposit.

There are limits on how much you can contribute for your first home; a member is able to add an additional $15,000 per year, up to $30,000 in total but contributions will be included in the before-tax (also known as concessional) contributions cap.

The before-tax (concessional) contributions cap generally includes superannuation guarantee contributions, personal deductible contributions and salary sacrifice. From 1 July 2017, this cap is $25,000 per year.

After-tax (also known as non-concessional) contributions can also be made into this scheme. These contributions won’t benefit from a tax concession, however the earnings on these contributions will benefit from the concessional rate of tax in superannuation and the higher returns often realised inside superannuation.

If you’re looking to buy as a couple, both members can take advantage of this scheme and combine savings for a single deposit.

On withdrawal, the contributions and earnings accumulated under the new measures will be taxed at your marginal tax rate minus a 30% tax offset. Whereas, any non-concessional amounts that are withdrawn, will not be taxed.

This is good news and will help members buy their first home by allowing savings to grow in a low tax environment.

Government fact sheet

2. Topping up your super from selling your principal home

From 1 July 2018, if you’re over 65 years old and have owned your home for over 10 years, you’ll be able to sell this house and make a non-concessional contribution of up to $300,000 into your super from the proceeds.

These contributions are exempt from the standard after-tax (also known as non-concessional) contributions cap. From 1 July 2017, this cap for persons aged over 65 is $100,000 per year, or zero if the person’s superannuation balance is greater than $1.6 million.

If you’re a couple who own the property together, both of you can take advantage of this measure.

This is good news for members who wish to downsize their home and have more funds to support their retirement through super.

Government fact sheet

Note: The above proposals still need to be legislated and we will keep you informed.

Although there were only a few changes to superannuation this year, there are a lot of changes to super coming into effect on 1 July 2017 from last year’s budget. There’s still time to maximise your super savings in the coming weeks by taking advantage of higher contribution caps and the bring-forward provisions.

Read more

And remember, you can talk to our team about your options by calling us on 1300 366 216 or book an appointment. There is usually no extra charge for members. 

As you may know, the Treasurer Scott Morrison delivered the Federal Budget on 9 May 2017. The government was clear to point out the budget was to deliver on fairness, security and opportunity. Unlike last year’s budget, there were only a few changes to super this year.

1. Encouraging savings for first time home buyers through superannuation

From 1 July 2017, members can add to their super account through salary sacrifice (above the normal compulsory contributions) to save for their first home. These additional contributions and earnings are allowed to be withdrawn from 1 July 2018 for their home deposit.

There are limits on how much you can contribute for your first home; a member is able to add an additional $15,000 per year, up to $30,000 in total but contributions will be included in the before-tax (also known as concessional) contributions cap.

The before-tax (concessional) contributions cap generally includes superannuation guarantee contributions, personal deductible contributions and salary sacrifice. From 1 July 2017, this cap is $25,000 per year.

After-tax (also known as non-concessional) contributions can also be made into this scheme. These contributions won’t benefit from a tax concession, however the earnings on these contributions will benefit from the concessional rate of tax in superannuation and the higher returns often realised inside superannuation.

If you’re looking to buy as a couple, both members can take advantage of this scheme and combine savings for a single deposit.

On withdrawal, the contributions and earnings accumulated under the new measures will be taxed at your marginal tax rate minus a 30% tax offset. Whereas, any non-concessional amounts that are withdrawn, will not be taxed.

This is good news and will help members buy their first home by allowing savings to grow in a low tax environment.

Government fact sheet

2. Topping up your super from selling your principal home

From 1 July 2018, if you’re over 65 years old and have owned your home for over 10 years, you’ll be able to sell this house and make a non-concessional contribution of up to $300,000 into your super from the proceeds.

These contributions are exempt from the standard after-tax (also known as non-concessional) contributions cap. From 1 July 2017, this cap for persons aged over 65 is $100,000 per year, or zero if the person’s superannuation balance is greater than $1.6 million.

If you’re a couple who own the property together, both of you can take advantage of this measure.

This is good news for members who wish to downsize their home and have more funds to support their retirement through super.

Government fact sheet

Note: The above proposals still need to be legislated and we will keep you informed.

Although there were only a few changes to superannuation this year, there are a lot of changes to super coming into effect on 1 July 2017 from last year’s budget. There’s still time to maximise your super savings in the coming weeks by taking advantage of higher contribution caps and the bring-forward provisions.

Read more

And remember, you can talk to our team about your options by calling us on 1300 366 216 or book an appointment. There is usually no extra charge for members.