The Turnbull Government is continuing to deliver on the comprehensive housing affordability package outlined in this year’s Budget, with a raft of measures to help Australians into their own home and increase the supply of and access to affordable housing coming into effect from tomorrow, 1 July.
We are implementing a comprehensive plan that will improve outcomes across the housing spectrum – from first home buyers and older Australians looking to downsize, to the homeless and those who depend on social housing.
The following measures will come into effect from tomorrow:
- First Home Super Saver Scheme – We are allowing first home buyers to contribute up to $15,000 per year in voluntary contributions, up to $30,000 in total that can be withdrawn for a deposit. Withdrawals will be allowed from 1 July 2018. Couples will be able to both access the scheme and combine savings for a single deposit. Contributions and earnings will be taxed at only 15 per cent rather than marginal tax rates and withdrawals taxed at marginal tax rates less a 30 per cent offset. Contributions must be made from within existing caps.
- Foreign resident Capital Gains Tax arrangements – We are strengthening the capital gains tax (CGT) rules to reduce the risk that foreign residents avoid paying CGT in Australia, including by no longer allowing foreign tax residents to claim the main residence CGT exemption, and by expanding the scope of the CGT withholding system for foreign residents.
- Better targeting tax deductions – We are disallowing deductions for travel expenses related to owning a residential investment property. This is an integrity measure to address concerns that such deductions are being abused. We will also confine plant and equipment depreciation deductions for items that can be easily removed, such as ceiling fans and dishwashers to those expenses actually incurred by investors.
- Affordable housing through Managed Investment Trusts – Managed Investment Trusts will be able to acquire, construct or redevelop property as affordable housing to hold for long-term rent. This will provide foreign and domestic investors with a new way of investing in affordable housing.
- Homes for Homes Initiative – We are providing $6 million to The Big Issue’s ‘Homes for Homes’ initiative which encourages homeowners and developers to donate 0.1 per cent of a property’s sale price to fund new social and affordable housing.
- Social Impact Investing – We are investing $10.2 million over 10 years to trial the use of Social Impact Investments aimed at improving housing and welfare outcomes for young people at risk of homelessness. The trials will be undertaken in partnership with States and Territories and target priority groups, including those supported by specialist homelessness services exiting the out-of-home care system or institutions such as juvenile detention.
These measures complement those that have already come into effect, or will continue to be rolled out in the next financial year.
Measures that commenced before July 1 include:
- Tightening the rules that apply to foreign investors – We are changing the rules that apply to foreign investors to ensure that more homes are available for Australians, including:
- limiting foreign investment approvals in new developments by implementing a 50 per cent cap on the total dwellings in a development that can be sold to foreign buyers;
- introducing an annual charge on foreign owners of residential real estate where property is not occupied or genuinely available on the rental market for at least six months of the year; and
- preventing foreign tax residents from claiming the main residence CGT exemption when they sell property in Australia (from 9 May 2017, with existing properties held prior to this date grandfathered until 30 June 2019).
This demonstrates that the Turnbull Government is delivering on its pledge to address issues of housing affordability across the entire housing spectrum and the broader commitment to deliver fairness, security and opportunity to all Australians.