Thursday, 25 February 2021
Owning your own home is a goal that many Australians, particularly younger Australians, aspire to, but for many the idea that you can save for a deposit for a home while working as an apprentice or in some other entry-level position seems fanciful. Today I'm here to tell young people in my electorate of Longman that owning your home is not as fanciful as you might believe. With a combination of regular income, adopting sensible spending habits and taking advantage of government grants and initiatives, you could be walking through the front door of your own home sooner than you think.
The federal government has a little-known scheme that can help working Australians save money for a deposit on their first home using their super fund. It's called the First Home Super Saver Scheme and it has been in place since July 2017. It works by allowing people who are saving for their first home to make voluntary contributions into their super fund, and these contributions can then be released to be used to buy your first home. The benefits of this are significant. Treasury estimates that this scheme can increase the deposit of a first home buyer by around 30 per cent compared with saving through a standard savings account. For a start, the contributions you make under the scheme are taxed at a discounted rate of 15 per cent, as opposed to being taxed at your marginal rate. The scheme also allows you to withdraw any earnings that you make on the super contributions—although it's important to note that the earnings aren't calculated at the same rate as the rest of your super; they are calculated using the rate known as the shortfall interest charge, which is currently around three per cent. It may seem low, but it's still higher than what you would get from interest on a savings account these days. Someone earning $65,000 a year who salary sacrifices $15,000 a year under the First Home Super Saver Scheme could, after two years, save around $5½ thousand more than if they saved through a standard savings account. The amount will vary, of course, depending on your income, how much you can sacrifice and the shortfall interest charge rate. On top of this, the federal government's $15,000 HomeBuilder grant is available until the end of March. My home state of Queensland also has a $15,000 first home owners grant available for a newly constructed home.
I completely understand that buying your first home is not easy these days and that it may seem like a distant dream for many, but with the right advice and by taking advantage of government initiatives like the super saver scheme and other grants this dream can become a reality. I can remember the joy and sense of accomplishment at buying my first home at the age of 21. It may have been a 110-square-metre box, with no carpets or curtains, but it was mine and it got me going. So, to all of you aspirational young people out there, I say: go for it. I am with you, and this government is with you.