Budget 2017: The plan to fight the housing crisis
OLDER Australians can pump an extra $300,000 into their superannuation fund when they downsize their homes.
And first home buyers will be able to save for a deposit by salary sacrificing into their superannuation account above their compulsory superannuation contribution from July 1.
Treasurer Scott Morrison told Federal Parliament such moves would help put downward pressure on rising housing costs.
He said a new plan for first home buyers would accelerate their savings by at least 30%.
The new First Home Super Savers Scheme will attract the tax advantages of superannuation but contributions will be limited to $30,000 per person in total and $15,000 per year.
"Contributions and earnings will be taxed at 15%, rather than marginal rates, and withdrawals will be taxed at their marginal rate, less 30 percentage points," Mr Morrison said.
"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.
"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."
Mr Morrison said mum and dad investors would still be able to use negative gearing, supporting the supply of rental housing and placing downward pressure on rents.
"There are no silver bullets to make housing more affordable. But by adopting a comprehensive approach, by working together, by understanding the spectrum of housing needs, we can make a difference," he said.
The government 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 and an online Commonwealth land registry detailing sites that can be made available for residential development.
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.
The government is increasing the capital gains tax discount to 60% to encourage affordable housing investment and will ensure greater income certainty through direct deduction of welfare payments from tenants.
Mr Morrison said there would be tougher rules on foreign investment in residential real estate and the main residence capital gains tax exemption would be removed.
"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," he said.
The Property Council of Australia has been calling on the Federal Government to address the housing supply issue.
"The best way to get supply moving is to unknot the complex and cumbersome planning systems which are slowing down our cities, costing jobs and pushing up house prices," council chief Ken Morrison said.