Buying property with your super

Hotly-contested changes in the 2017 budget have promised to open the property market to first home buyers by allowing property seekers to access their super savings.

VIEW.com.au look at what these changes mean, how can you make the most of them and most importantly, should you?

What are the changes?

As of July 1, 2017, individuals have been able to make additional, voluntary contributions to their superannuation funds in order to eventually withdraw these savings and the earnings generated from them from July 1, 2018.

Up to $15,000 in voluntary contributions can be made each year, with a maximum of $30,000.

Individuals will be able to withdraw this maximum of $30,000 and couples are free to combine their savings to make single deposits, reducing the time necessary in saving for a deposit.

These changes are intended to help fight the challenge of housing affordability in Australia and have attracted a range of opinions from financial pundits.

Why make changes to super?

Despite the warnings the global financial crisis offered in relation to an inflated real estate market, house prices in Sydney alone have increased by 113.7 per cent since January 2009, with the combined increase in house values across Australia’s capital cities at 72.4 per cent.

With these huge increases in property values and relatively low wage growth in the same period, housing affordability has become a major concern for voters nationwide, and as such a major concern for Australian politicians.

As a potential home owner seeking a way to accelerate your savings efforts, the government’s super scheme may be a valuable savings tool.

However, caution needs to be taken before investing significant funds into a policy that remains to have its legislation finalised and as such risk having your savings locked within your super fund if the policy fails to get through parliament.

If you have the freedom to do so, wait for the policy to go through parliament and find out the particular details about how the ATO will judge whether you are eligible to withdraw your savings.