High profile politician throws support behind plan to let FHBs access super

by Adam Smith30 Jul 2014
A prominent politician has thrown support behind calls to allow first homebuyers to access their superannuation to pay for a house deposit.

HomeStart chief executive John Oliver told a Senate Economics References Committee meeting yesterday that Australia should implement a scheme similar to one in Canada which allows Canadian first homebuyers to access up to $25,000 for a deposit. Now, high-profile independent Senator Nick Xenophon has voiced his support for the idea.

“With more and more Australians finding it difficult to break into home ownership, adopting the Canadian scheme would make a difference to many thousands of Australians each year,” Xenophon said.

Xenophon argued that the scheme has made a dramatic difference to housing affordability in Canada. He said it has safeguards in place which could be implemented in Australia, including the requirement to repay the super fund within 15 years of a home purchase.

“As HomeStart Finance said today, there’s something strange about being able to access your super fund if you are about to default on your housing loan, but you can’t access it to put a deposit on a home in the first place," Xenophon said.

COMMENTS

  • by Steve McClure 30/07/2014 10:45:30 AM

    Umm, has anyone looked up the Canadian scheme and thought it through?

    Maybe the reason Canada has it, is they don't seem to have the substantial FHB grants that Australian receive, just some tax rebates and concessions.

    Their first home buyers have to have the amount already in an RSP (retirement savings plan). They can't withdraw more than $25,000, assuming a young person has that accrued already. Then, they have to pay it back, each year within 15 years, being a commitment that the lenders factor into the servicing. It also means that while the money is out of the fund, it's not attracting an investment return for which it's intended, i.e. retirement. Sure, still investing in property, but if people use the scheme as an easy way to access super prematurely, is that undermining the imperative of super?

    I'd rather see our FHOG's smaller, but stretched across both new & non-new homes and the buyer could top it up with an interest free loan over 15 yrs, so it doesn't detract from their super. This would allow a lot more new entrants than the Canadian scheme.