Fri, Oct 20, 2017

Australia Announces Budget Housing Initiatives

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Australian Money with Australian Treasurer the Hon. Scott Morrison MP

The Honourable Treasurer Scott Morrison's Paraphrased Speech...

"The Commonwealth will replace the National Affordable Housing Agreement that provides $1.3 billion every year to the States and Territories, with a new set of agreements, with the same funding, requiring the States to deliver on housing supply targets and reform their planning systems.

We will also establish a $1 billion National Housing Infrastructure Facility, based on a UK model, to fund 'micro' city deals that remove infrastructure impediments to developing new homes.

An online Commonwealth land registry will be established detailing sites that can be made available for residential development.

The Turnbull Government will also help deliver tens of thousands of new homes needed in Western Sydney as part of our Western Sydney city deal.

A new National Housing Finance and Investment Corporation will be established by July 1 next year to provide long-term, low-cost finance to support more affordable rental housing. States and Territories will also be encouraged to transfer stock to the community housing sector.

Other measures to address supply include: allowing Managed Investment Trusts to be used to develop and own affordable housing, providing investors in affordable housing with greater income certainty by enabling direct deduction of welfare payments from tenants, and increasing the capital gains tax discount to 60 per cent for investments in affordable housing.

These measures will also support State, Territory and local governments imposing inclusionary zoning requirements on new development sites and provide more vehicles for superannuation funds to invest in affordable housing.

And tonight I announce $375 million for a permanent extension of homelessness funding to the States, with a continued focus on supporting young people and victims of domestic violence.

On the demand side, for those who are trying to save to buy their first home, we will support them by providing a tax cut on their first home deposit savings.

First home buyers will be able to save for a deposit by salary sacrificing into their superannuation account over and above their compulsory superannuation contribution from July 1.

The First Home Super Savers Scheme will attract the tax advantages of superannuation. Contributions and earnings will be taxed at 15 per cent, rather than marginal rates, and withdrawals will be taxed at their marginal rate, less 30 percentage points.

Savers will not have to set up another account, they can just use their existing super account and decide how much of their income they want to put aside to save for their first home deposit.

Contributions will be limited to $30,000 per person in total and $15,000 per year.

Under this plan, most first home savers will be able accelerate their savings by at least 30 per cent.

We will encourage older Australians to free up housing stock, by enabling downsizers over the age of 65 to make a non-concessional contribution of up to $300,000 into their superannuation fund from the proceeds of the sale of their principal home.

And on demand management, we will continue to prefer the scalpel to the chainsaw, to avoid a housing shock.

Mum and dad investors will continue to be able to use negative gearing, supporting the supply of rental housing and placing downward pressure on rents.

Our regulatory agencies will continue to use the flexible and calibrated controls they have available.

And we will legislate to extend APRA's ability to apply controls to the non-ADI sector and explicitly allow them to differentiate the application of loan controls by location.

Even tougher rules on foreign investment in residential real estate will be introduced, removing the main residence capital gains tax exemption, and tightening compliance.

We will also apply an annual foreign investment levy of at least $5,000 on all future foreign investors who fail to either occupy or lease their property for at least six months each year.

And we will restore the requirement that prevents developers from selling more than 50 per cent of new developments to foreign investors."

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