Saving for a house deposit is one of the toughest uphill battles facing Australia’s young people.
But in Tuesday’s Budget announcement, the Federal Government pledged to help rectify that by unveiling a new savings scheme.
From July 1, Australians saving for their first home can use their pre-tax income to make additional superannuation contributions of up to $15,000 per year, maxing out at a total of $30,000.
This money will be taxed at a discounted rate of 15 per cent. And it’ll sit pretty until it’s ready to be withdrawn for a house deposit.
According to government figures, somebody who has a salary of $70,000 and deposits $10,000 a year, will have an estimated $25,892 upon withdrawal after three years. This is about $6210 more than what could have been achieved through saving in a regular bank account.
The concept is a relatively simple one. And there has been broad public support of it. Because at least it’s something.
But there is one niggling question I can’t get out of my head.
So, what if I change my mind?
What happens if you decide, in the end, you don’t want to buy a house?
That’s the catch. Because the answer to that is: tough luck.
A Treasury spokesperson tells Mamamia that if you change your mind about how you want to spend your money, you won’t simply be able to withdraw it.
What you salary sacrifice under this scheme will essentially be treated like any other superannuation contribution: it’ll stay there until you retire. The law only allows for limited exceptions, such as terminal illness or severe financial hardship.