How does the Super Home Deposit system work?
A first home buyer can use up to 40% of their super balance, up to a maximum of $50,000, to use as part of their Deposit for a home.
They must provide at least 5% of their Deposit from their own savings.
This is of course subject to the LNP being re-elected in the May 2022 Federal Election.
Will the Super Home Deposit system cause higher prices?
Some experts say it might cause a short term increase.
Brendan Coates from the Grattan institute agreed that while the scheme would increase house prices in the short term, the long-term impact would be modest.
Politicians of course argue both sides.
Anything that makes it easier for more people to buy a properly is liable to increase prices. This is due to supply and demand. The more people that are able to purchase and it becomes a sellers market, with prices rising.
In my view, all of the Politicians plans to make it easier to buy a home will cause an increase in prices.
Will the Super Home Deposit system cause reduction in super balances?
Of course, if a person takes 40% out of their super, then their super balance will go down, UNTIL, they put it back in when they sell the property, with any increase in the value of the property.
Effectively this means you never lose your super balance, it is just invested in your own home itself.
One of the conditions of this scheme is that people who have accessed any of their superannuation must return the amount taken out, plus any capital gains, if they sell the house.
This ensures that they do not lose any of their super.
However, if their house value does not keep up with Super returns, then you may lose some value. But if your property increases in value faster than your super, then you win. Plus, of course, you have somewhere to live.