Discussion on the proposed First Home Super Saver scheme and the Contributing the Proceeds of Downsizing shut toward the beginning of August, with draft legislation just recently being tabled in Parliament.

A few changes have been made using the first outlined-out recommendations offered with the Federal Budget last May.

The First Home Super Saver (FHSS) proposition would see qualified first home purchasers ready to contribute up to an additional $15,000 every year (to an aggregate greatest of $30,000) into their superannuation which would then be released if used to purchase a home. However the commitments still tally towards the yearly concessional and non-concessional caps, and are not in addition to those caps

Eligibility is constrained to those aged 18 and over who have not utilized the FHSS earlier and have never possessed real property in Australia. In the event that acquiring with someone else who as of now has property, you would not be precluded from using the FHSS.

Be that as it may, there must be one request for a release of the amounts held in superannuation. On the off chance that you withdraw not as much as the aggregate $30,000 in addition to profit in an initial release you can't later look to withdraw further amounts.

Downsizing contributions

The other proposed plan would permit people aged 65 or over to make a non-concessional commitment to super of up to $300,000 from the returns of selling their home. It is proposed to begin from July 1, 2018.

These contributions won't count towards the non-concessional contribution cap and the individual influencing the contribution won't have to meet the current maximum age, work or $1.6m balance tests for contributing to super.

The home sold must have been the primary dwelling of the individual and must have been owned by the individual for the past 10 or more years. Under this policy from the proceeds of the sale, both members of a couple can contribute to super ultimately freeing up to $600,000 for super under this scheme.

Eligibility is reliant on:

• the property sold must have been the primary residence of the person for at least 10 years and must be held by the person for that period
• the property must be located in Australia
• the property cannot be a houseboat, caravan or other mobile home
• the contribution must be made within 90 days of the disposal of the dwelling, or such longer time as allowed by the Commissioner
• the individual must choose to treat the contribution as a downsizer contribution, and inform their superannuation provider in the approved form of this choice at the time the contribution is made, and
• the individual cannot have had downsizer contributions in relation to an earlier disposal of the main residence.

Downsizer contributions are not tax deductible and can be made for a person in connection to one offer of the main residence. Further, downsizer contributions can't be made later on in connection to the sale of another fundamental residence.

Consequently, on the off chance that you sell your house at age 65 yet just contribute say $200,000, in the event that you later sell an eligible home you will not be able to contribute any of that to make up the amount not initially contributed. However, you can make multiple contributions (up to the cap amount) from the sale of the same residence.

Pension test still a consideration

One factor that might confine the advantage of this proposition, and subsequently play on the minds of older Australians on whether to sell their homes, is that the contributions will at present count towards total pension assets tests. This implies that older Australians will move finances out of an exempt asset (their home) into a non- exempt asset.

As of now, you can have up to $350,000 in non-exempt assets and still be eligible for the full pension. On the off chance that you offer the house and contribute up to $300,000 into your superannuation, at that point this will expand your non-exempt assets by $300,000, and this is probably going to cause a decrease in your government pension payment.

Tax Store Accountants Dandenong.

Tax & Super Australia: More details of First Home Super Saver and Downsizing schemes revealed