First-home buyers should be able to use super to get into property market
First-home buyers should be able to use their super as collateral for a home, the inquiry into housing affordability and supply in Australia has recommended.
The House of Representatives Standing Committee on Tax and Revenue tabled its report following its inquiry into housing affordability and supply in Australia today, with the use of super as security for a home loan a key measure.
"The Committee is of the view that first home buyers should be able to use their super as collateral for a housing loan given that paying off a mortgage is a very common way of saving for retirement. This would reduce the deposit needed to enter the housing market and have a similar effect to allowing access to super," the report reads.
"However, in contrast to allowing access to super, under this approach super balances would only be reduced if the first home buyer defaulted on their home loan, which is an unexpected and infrequent occurrence in Australia. This approach should limit negative impacts on younger Australians and women."
The committee clarified that such a measure would be dependent on also implementing other recommendations to increase housing supply, such as incentive payments to state and local governments to encourage the adoption of better planning and property administration policies.
"Otherwise, an increase in households' ability to borrow would likely increase property prices. This recommendation will therefore remove the largest barrier for home buyers; being the deposit," the recommendation reads.
Responding, Senator Andrew Bragg said the recommendation was "very sound". A commenter responding to Bragg's tweet asked: "Would that mean a person who is unable to pay their mortgage loses both their house and retirement savings?"
Another key recommendation from the report that has the potential to involve super funds would see Treasury formulate partnerships with the private sector to deliver discount-to-market rent-to-own affordable housing.
"This will diversify the housing market as well as provide affordable housing options for low to medium income earners, people experiencing homelessness, women escaping domestic violence, parents and children," the report says.
Other recommendations include all states and territories scrapping stamp duty in place of a land tax; increasing urban density in other locations; and that the federal government should institute a grant scheme that pays states and localities for delivering more housing supply and affordable housing.
In its dissenting report, without specifically touching on the recommendation concerning superannuation, Labor said it does not support the report.
"We had hoped that this inquiry would begin to address the structural issues in the housing market and begin the path to more affordable housing for the many. Unfortunately, it falls well short and with few exceptions, largely recommends business as usual," Labor committee members said.
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