Work Test Changes

In our February blog, we discussed a number of changes to the superannuation contribution rules to provide more flexibility for members to save for their retirement via superannuation. These changes included:

• Allowing members aged 65 and 66 to make voluntary contributions to superannuation without having to meet the work test,

• Increasing the cut-off age for spouse contributions from 70 years to 75 years, and

• Enabling members aged 65 and 66 to make up to three years of Non-Concessional Contributions (NCC) to super under the bring forward rule.

While the first two changes have been legislated to come into effect on 1 July 2020, the change to the NCC Bring-Forward rule is yet to be passed.  As a result, with Parliament not scheduled to sit again, it is unlikely that this change will become law by its proposed 1 July 2020 start date.
  

Homebuilder Program

The HomeBuilder program has been announced to help drive economic activity across the residential construction sector by providing grants of $25,000 to eligible owner-occupiers for new home construction and substantial renovations.

If you’re looking to build a new home, complete a knock-down rebuild or to substantially renovate your existing home, you may be eligible to apply for a Government grant of up to $25,000 to put towards construction costs. The HomeBuilder program will complement existing support measures, such as state-based first home-owner grants and stamp duty concessions. It is also accessible in conjunction with the First Home Owner Super Saver Scheme and First Home Loan Deposit Scheme.
The good news is, you don’t need to be a first home owner to apply for the grant, so if you’re not eligible to participate in any existing schemes, this program might provide you with support.

To be eligible for a grant, the following eligibility criteria must be met:

• You must be an Australian citizen and you need to be aged 18 years or older.
Your income must be below one of the two caps below:
• $125,000 per annum for an individual applicant based on your latest tax return (either 2018/19 or 2019/20), or
• $200,000 per annum for a couple based on both individual’s latest tax returns (either 2018/19 or 2019/20)

Date of contract and construction:
• The building contract must be entered into between 4 June 2020 and 31 December 2020.
• Construction must commence within three months of the contract date.

Grant to build a new home – requirements:
• The new home must be occupied as a principal place of residence.
• The completed value of the new build (land and property) cannot exceed $750,000.
• This criteria applies where vacant land is purchased either before or after 4 June 2020, with a contract to build entered into after this date.

Use of property:
• The home must be used as your primary place of residence.
• The new or renovated dwelling cannot be intended for use as an investment property.

As always, if you have any questions or concerns please let us know.

Important Notes

This publication is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Barwon Financial Planning strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances.

To learn more, please contact the Barwon Financial Planning team for a consultation.