Superannuation for First Home Buyers Deposit in South Australia
Tuesday 16 September 2014 @ 11.50 a.m. | Legal Research | Taxation
The independent senator for South Australia, Nick Xenophon, has said he will introduce legislative changes in the coming spring sitting period to allow new home buyers to ‘borrow’ money from their super account to help pay their deposit.
Senator Xenophon said the scheme would be similar to one in Canada, which allows borrowers to take up to $25,000 from their superannuation and repay it over 15 years.
The Canadian Scheme
The Canadian scheme allows those eligible to borrow up to $25,000 from their superannuation savings, to be repaid over 15 years, and has been taken up by one-eighth of first home buyers since it was introduced in 1992.
Senator Xenophon said:
“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.”
Other Reactions to the Announcement
HomeStart chief executive John Oliver said helping all segments of the community to enter the housing market would boost the economy:
“It is ironic that a household in difficulty with their mortgage has the option to access superannuation to clear arrears, whereas a first-home buyer in an otherwise good financial condition cannot temporarily access their super for a deposit and then replenish those funds over an extended period as occurs in Canada...There are various models working in other countries that, on the surface, appear to help overcome some of the issues confronting first home buyers in particular and also address housing affordability.”
However, a spokesman for the Association of Superannuation Funds of Australia said superannuation should only be used for retirement. Marinis Financial Group director Theo Marinis said:
“The minute they start mucking around with the scheme and unwind the original restrictions of the superannuation rules, they undermine the whole system...The whole point of super is to keep those assets totally separate, as risk free as possible, so you diversify your investment pool and the government gives you tax concessions so there is a pool of money there when you retire.”
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