It’s often hard to sift through (and stay awake through) federal budgets and drill down to what it really means for you.  We looked into what some of this years’ announcements will mean for the residential property market.

The 2017 Federal Budget announced some huge regulation changes which will affect a range of residential property buyers including:

First Home Buyers

Buying a home remains the ultimate dream for a lot of young Australians and this year’s Budget includes a hugely exciting announcement which will help first home buyers achieve their dream… while still enjoying the odd smashed avo.

From 1 July 2017, first home buyers will be able to use their superannuation towards a home deposit, in what is seen as a bold Government move to give young Australians a fighting chance at home ownership.

Up to $30,000 a year can be deposited into a superannuation account over and above compulsory employer superannuation contributions, and up to $15,000 of that can be salary sacrificed in pre-tax dollars.  First home buyers will be able to withdraw this cash plus any earnings as early as one year after the initiative commences.

There are massive advantages to building a home deposit in a superannuation account; funds are only taxed at 15 per cent and withdrawals are taxed at 30 per cent below the marginal tax rate.  It is estimated that this will help accelerate savings by at least 30 per cent when compared to using a normal savings account.

There will also still be a First Home Owners Grant of $15,000 available from 1st July, which paired with no stamp duty for brand new homes under $750,000, gives young buyers a huge leg-up into the property market and means the dream of home ownership can become reality for many young Australians.


Changes to tax depreciation regulations coming into effect from 1st July this year will see depreciation deductions on second hand properties significantly reduced.

Brand new property (whether apartments, house and land packages or terrace homes / townhouses) has always had the highest level of claimable depreciation deductions, but with the Budget changes, this gap will become considerably wider.

The higher deductions will make brand new properties even more appealing to investors which in turn may also influence a boost in residential development.

We looked at a case study of a 3 bedroom terrace home in Robina and found that in the first year, a buyer of this brand new property could claim up to $18,557 per annum in tax depreciation deductions, totalling $439,696 over 40 years.

As well as having the highest claimable depreciation value brand new properties offer a huge range of advantages for investors including:

  • Lower maintenance costs
  • Lower vacancy rates
  • More energy efficient and environmentally-friendly features than older properties (including being able to claim water usage costs from tenants when water efficient fixtures are in place)
  • Attracting higher-quality tenants, who are willing to pay a premium price
  • Typically more consistent cash flow, which can equate to a higher resale value

So when it comes to selecting the right investment property, it seems that brand new is the new black.


Older Australians weren’t overlooked in the Budget in terms of being incentivised to make their next move in the property market.  People aged 65 years or over will be able to make a non-concessional (after tax) superannuation contribution of up to $300,000 from the proceeds of selling their primary residence.

It is a fairly common move within the empty nester group to offload the larger family home and move to a terrace home or apartment once the excess space is no longer required.  Increased security and reduced maintenance become increasingly appealing at this stage of life, with downsizers often moving into a smaller, brand new home.

The depreciation benefits on offer will make buying a brand new home even more attractive to these older Australians as they set off into the sunset to spend the kids’ inheritance.

Currently annual, non-concessional superannuation contributions are capped at $150,000 per annum, meaning some downsizers pay a high rate of tax to place proceeds of a home sale into their super. Under the new regulations, this sector will be exempt from the age test, work test and $1.6million balance test usually required when making non-concessional contributions.

The only catch with the new initiative for our grey nomad elders is that they have to have lived in the property for at least 10 years. The new initiative won’t commence until July 2018.  It can take that long to reorganise and reduce a lifetime’s worth of possessions so we are likely to see our elder Australians planning to make their move.

Disclaimer: This content has been compiled from a range of independent sources and does not constitute formal advice.  Information is provided without taking into account the objectives, financial situation or needs of any particular individual. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs, and if necessary, seek appropriate professional advice.  Although the information is provided in good faith, it is also given on the basis that no person using the information, in whole or in part, shall have any claim against RPA Properties Pty Ltd, Robina Projects Australia Pty Ltd and any subsidiaries (“Robina Group”), its employees or consultants.