Could you use your super to buy your first home?

Housing affordability is one of the hot topics in the lead-up to May’s federal budget. One policy the Australian government is considering involves allowing Aussies to access their superannuation to buy their first home, as The Australian reported on February 22.

What’s being proposed and why?

The Turnbull government is pushing for a scheme that would enable Australians who have made voluntary contributions to their super to access some of their retirement funds early in order to purchase their first property.

“There are many ideas that are in the embryonic stage,” Michael Sukkar, the Minister responsible for housing affordability, told The Australian.

House prices have increased dramatically in recent years, as ABS data shows, which is not news to first home buyers struggling to enter the property market.

Affordability is a pertinent issue facing Australians under 35 in particular. Subsequently, government-initiated policies to assist first home buyers will surely be welcomed.

Following in New Zealand’s footsteps

Across the ditch, our Antipodean neighbours introduced a similar scheme in 2007 to help Kiwis save for their retirement.

Under the KiwiSaver scheme, New Zealanders are able to put their own contributions, their employer’s contributions, returns on investment and member tax credits towards their first property. This is provided they’ve been participating in the scheme for at least three years and have a minimum balance of $1,000 in their KiwiSaver account.

Kiwis can also take advantage of the KiwiSaver HomeStart grant, which is between $3,000 and $5,000, depending on how long they have been contributing.

Regardless of whether the Coalition’s proposed scheme ends up being one of the measures introduced by May’s federal budget, the fact that the government is seriously addressing housing affordability is good news for those thinking about taking out their first home loan in the near future.