Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

Joel Robinson

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

&nbsp;

Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.

The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.

The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.

The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.

[smartcode_project:default project_id=144441 project_image_fid=370975]

Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.

Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.

Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.

[smartcode_project:default project_id=144441 project_image_fid=370981]

Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.

“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.

“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”

“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.” 
[smartcode_project:default project_id=144441 project_image_fid=370977]

The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.

Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.

The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.

The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.

[smartcode_project:default project_id=144441 project_image_fid=370980]

Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.

“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.

“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”

A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.

That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.

The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.

[smartcode_project:default project_id=144441 project_image_fid=370978]

According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.

Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.

The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.

The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.

That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.

The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.

[smartcode_project:default project_id=144441 project_image_fid=370979]

The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.

“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.

“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”

The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.

[smartcode_project_cta:default project_id=144441]

Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

First look: Aqualand joins St Leonards apartment party

Superannuation

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With the deadline for the new superannuation rules set to take effect from July, retired Australians should focus on a strategy to claim capital gains tax relief on investments such as property that become partly taxable as a result of the new rules.
And the transfer from super savings from a pension to an accumulation account must be done by June 30. 
CGT relief is available for self-managed super funds (SMSFs) to provide temporary relief from certain capital gains that might arise as a result of individuals complying with the transfer balance cap, and Transition to Retirement Income Stream (TRIS) reforms, commencing on 1 July 2017, says the Australian Taxation Office website.
CGT relief allows profitable investments in super pensions, currently tax-free, to have their cost bases reset to a higher value.
The transfer balance cap is $1.6 million at the moment, and it limits the amount of capital individuals can transfer to the retirement phase of their superannuation accounts. This in turn, limits the amount of superannuation fund earnings that are exempt from taxation, says the ATO.
Retirees who will be affected by the rule change are those who have, or are deemed to have, a pension interest in a total super balance that exceeds $1.6 million, as well as anyone with profitable investments in transition to retirement income streams (TRISs). From July the earnings generated by TRISs will no longer be tax free.
CGT relief could be worth many tens of thousands of dollars to retirees or TRIS holders. It's also an entitlement that many might delay or forgo because of the complexity. But not using the opportunity of the concession window could lead to regret down the track, says an article in The Australian Financial Review.
If you haven't already drafted a plan, now is the time, says self-managed super strategist Darren Kingdon of Kingdon Financial Group. 
An action plan should involve being aware of the capital gains that exist for each investment you own in a super pension and where the new rules will oblige you to transfer assets to an accumulation account. Once in accumulation, assets will be either fully or partly taxed, albeit concessionally.
The plan should also involve having an estimate of the additional tax that will need to be paid because pension assets will no longer be tax free and the impact this will have on a retiree's overall income. 
Earnings on assets rolled to an accumulation account will be taxed at 15 percent and capital gains at either 10 percent or 15 percent, depending on how long they are held for. 
An action plan will require being aware of the procedures that need to be  followed in order to implement CGT relief, a task not helped by the fact that important documents, such as an approved form on which the assets in question must be recorded, are not yet available.
Investments should be assessed on an asset-by-asset basis, says Kingdon in the post in AFR. For investment property and interests in investments owned through trusts, up-to-date valuations will be needed.
To illustrate how CGT relief might work, a 65 years-plus retired reader asks about his $4 million SMSF pension portfolio that is broadly made up of two $2 million commercial property units that are wholly dedicated to paying a pension. The properties each cost about $1 million.
Even though the reader will only be allowed to have $1.6 million of investments in a pension account from July 1, he expects both properties will remain in super because stamp duty will prohibit him from moving them elsewhere, even if he wanted to.
The reader asks if he will be able to commute property A to an accumulation account after having its tax base reset to $2 million under the CGT relief rules shortly before midnight on June 30.
And, in the case of property B, can he designate 80 percent of its value, or $1.6 million, as being in the pension phase and 20 percent, valued at $400,000, as being in accumulation phase and reset the cost base to $2 million as at June 30? And how would this property be taxed if, in two years' time, it was sold for $3.5 million?
Unfortunately, says Kingdon, it is not possible under Tax Office guidelines for an SMSF to partially segregate a single asset in the manner described for property B. Tax accountant Gordon Cooper of Cooper and Co says this is because you can't split the ownership of a single asset within the same legal entity.
In order to trigger an entitlement to CGT relief for both assets, a "cessation event" must occur between November 9, 2016  and  June 30, 2017.  
In order to claim CGT relief and reset the value of each property from $1 million to $2 million, the reader will need to commute the total excess of $2.4 million back to an accumulation account on or before June 30 and use what is known as the proportionate method to calculate tax for the remainder of the 2016-17 financial year, and in future years. 
This approach locks in the CGT relief to $2 million. If property B is later sold for $3.5 million, the notional $1.5 million gross capital gain is reduced to $1 million under the one-third CGT discount available to SMSF assets owned for more than one year, or one year beyond the CGT reset date.
But that's not the only calculation that must be performed.
Under the current rules, 100 percent of the $4 million pension is exempt from tax. Under the new rules, because only $1.6 million of $4 million is in tax-free pension phase  – or 40 percent – and 60 percent will be in a taxable accumulation account, this proportion will apply to any future CGT liability.
It means 60 percent of the $1 million gross gain, or $600,000, will be added to the fund's taxable income. It will be taxed at 15 per cent, resulting in a $90,000 tax bill. Without the CGT relief, the notional gains will be $2.5 million, discounted to $1.675 million. With 60 per cent or just over $1 million taxable, the tax liability will be around $151,000.
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j.ballantyne1990-6AQqhLzZaK

You only have two months to plan for the CGT relief on super pensions 

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The Federal Budget has given seniors a nudge as part of its attempts to ease housing affordability by getting them to downsize. 
From July 1, 2018, people aged 65 and over will be able to make a non-concessional contribution (NCC) of up to $300,000 from the sale of their principal residence into their superannuation, if they have lived there for at least 10 years.
With this move, the government aims to encourage empty nesters to downsize to free up more multi-bedroomed properties.
The downsizing contributions will be outside of existing contribution caps, and both members of a couple will be able to take advantage of the measure from the same home. The scheme is expected to cost the government $30 million in lost revenue over the forward estimates period, News.com.au reported.
The new incentive is in addition to concessions already permitted and will be exempt from the age test, work test and the $1.6 million balance test for the NCC.
The measures apply from July 1, 2018.
The budget measure has been welcomed by the SMSF Association.
Association Chief Executive Officer John Maroney it would allow a couple to contribute up to $600,000 from the sale of their home to superannuation outside of the existing caps and balance restrictions.
"This means people can make a significant top-up contribution to their super funds, allowing them to fund a dignified and secure retirement,” he was cited as saying by moneymanagement.com.au.
"While the measure may not be a significant trigger to encourage downsizing, we welcome the ability for older Australians to top up their superannuation where downsizing their home provides them with funds to do so.”
But there are concerns for down-shifters on how the extra super assets would reduce their part-pension entitlement.
SMSF Association head of policy Jordan George had advised caution about such a move ahead of the budget.
“Incentives to encourage people to downsize their home is a sensible idea,” George told selfmanagedsuper. 
But while the exemption was a good idea in principle, George said it was crucial to consider any ramifications of such a measure for people’s pension entitlements. 
“The assets test for the age pension when people downsize and the profit from downsizing may affect their entitlement to the age pension – that could become a significant issue,” he noted. 
KPMG tax partner Damian Ryan said allowing older couples downsizing to contribute to their super funds was welcome news.
"This will allow some older Australians to sell the family home and contribute some of the proceeds into superannuation,” he said, adding, “Those on the age pension are unlikely to take up this initiative.”
He said the measure would be attractive to a group of members who would like to sell their family home but due to contribution caps would have been prevented from topping up their superannuation balance, essentially transferring funds from one tax-preferred asset to another.
Also, residence requirements for the Age Pension and Disability Support Pension are increasing to 10 years continuous residence, including five of a person’s working life, which will affect about 2,400 people.
 
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Budget 2017 encourages downsizing by pensioners, caution urged on entitlements

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With changes to the superannuation system coming up on July 1 property investors need to review their circumstances.
They need to plan ahead to sell their property and contribute it into their superannuation.
Starting on July 1, the maximum you can contribute personally to superannuation (after-tax) will be $100,000 a year, or $300,000 averaged over three years.
Higher limits of $180,000 a year or $540,000 over three years apply now.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/01/gold%20egg.jpg" alt="">
These changes will affect people who own real estate through a self-managed super fund (SMSF) especially retirees whose property supports pension payments.
Other groups might also be impacted by these changes, however each individual is different and it is advisable to seek individual advice.
For more information download the PDF <a href="https://www.propertyobserver.com.au/images/stories/marketing/ebooks/super-changes-ebook.pdf" target="_blank">here</a>.
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po-LsXgBTHBmX

What the July 1, 2017 super changes mean for property investors: Property Observer free eBook

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The government is considering incentivising downsizing for retirees to improve housing affordability for the young, with retirees who sell off their family home likely to be offered exemptions from new limits to be placed on superannuation.
Although it is unlikely the sale proceeds will also be quarantined from the age pension assets test, The Australian Financial Review reported, citing sources.
The government has considered exemptions to both the $1.6 million cap on a super retirement fund and the non-concessional amount that can be contributed annually, if the top-up is coming from the sale of a large family home, it said.
Treasurer Scott Morrison will deliver the budget on May 9. The likely May budget package was first floated two years ago by Scott Morrison when he was social services minister, as reported by Property Observer recently.
It is hoped breaking down a few barriers will encourage older Australians to down­size homes, thereby releasing more stock to the market and also unlocking billions in capital.
While the move aims to help improve housing affordability, as promised by the government, by freeing up more stock for young families, it also hopes to help shore up the Coalition's support among its so-called base, which is still fuming over $6 billion in cuts to superannuation tax concessions contained in last year's budget, the AFR reported.
Some people are so cranky that over the weekend it emerged that Melbourne businessmen, led by Jack Hammond, QC, and John McMurrick, a former MP, were advocating a challenge to the preselection of Minister for Revenue and Financial Services Kelly O'Dwyer and replacing her with Tony Abbott's former chief of staff, Peta Credlin.
Credlin said she was not interested and O'Dwyer said she was not afraid of a challenge.
The amount of super people have does affect their eligibility for an age pension. Under the budget proposal, if an age pensioner wants to downsize and top up their super, they could do so but lose some or all of their pension.
Those to be targeted by the government policy are pretty much self-funded retirees who don't receive a pension and would be encouraged to sell their home by being able to bolster their retirement income.
Under the super changes which come into effect on July 1, a retirement account, on which the earnings are tax free, will be capped at $1.6 million. Any excess must remain in an accumulation account which will continue to be taxed at the concessional rate of 15 per cent.
Also under the changes, people aged under 65 can contribute a maximum of $100,000 a year in non-concessional contributions to their super until the $1.6 million cap is reached.
Those aged over 65 can contribute $100,000 a year in non-concessional contributions but only if they meet a work test of having done 40 hours work over 30 consecutive days.
It is believed exemptions to both the $1.6 million cap and the $100,000 non-concessional contributions cap are being considered in the event of lump sum contributions from the proceeds of downsizing. It is unclear whether some or all of the proceeds from downsizing could be used to bolster super.
Labor was the first to propose such a policy. When last in government, it announced a trial scheme in which up to $200,000 in sale proceeds would be exempt from the pension assets test. The trial was scrapped when Tony Abbott won government.
Shadow treasurer Chris Bowen was quoted by the AFR as saying that Labor still favoured the idea and would consider whatever the government put in the budget.
"Labor has supported measures to make it easier for seniors to downsize their housing without penalising them. That's why Jenny Macklin had a pilot program in the 2013 Budget to work on exactly that – a pilot program scrapped by the Liberal Party in 2013," he said.
"If the government wants to help older Australians downsize their home, why did they abolish a Labor program that did exactly that. We're receptive of similar measures subject to our normal policy processes and ensuring the government doesn't botch their implementation."
The Property Council of Australia supports exempting downsizers from the pension assets test, but only for people aged 75 and older to prevent a free for all among retirees.
"We have to reduce transaction costs which lock people into homes that don't suit them and are a big drag on the economy," said council chief executive Ken Morrison.
"As well, pensioners are discouraged from downsizing because of the way the pension assets test is configured. Some small changes to the downsizing rules could see tens of thousands of family homes enter the market."
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prateek24-ezbwHMbNAk

Government considers super breaks for downsizers to improve affordability

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Self-managed superannuation funds would be banned from borrowing money under an expanded housing affordability policy being unveiled by federal Labor today as unchecked growth could pose a threat to the nation's financial system stability over the long term due to growing exposure to bad investments.
The new measures will include adopting a nationally consistent Vacant Residential Property Tax, as recently imposed by the Victorian government, to curb investors buying properties and leaving them vacant.
Labor will also double the fines imposed on foreign investors who illegally purchase residential real estate. 
Victoria to tax owners for leaving homes vacant as it tackles housing crisis
Labor leader Bill Shorten and Shadow Treasurer Chris Bowen have a new suite of seven measures that will add to Labor's existing policy to curb capital gains tax concessions and negative gearing.
A Labor government would adopt a Coalition proposal to establish a bond aggregator, which provides a larger and cheaper pool of funds for the private sector to build community housing.
It will reappoint a housing minister.
Since September 2013, when the Coalition came to power, prices in Sydney have increased by nearly 50 per cent and by more than 30 per cent in Melbourne.
Residential vacancy rates in the Sydney metropolitan market have sunk to 1.9 percent, while Melbourne's vacancy rate fell to a 10 year low in February to 1.7 percent. 
Former banker David Murray recommended in his 2014 Financial System Inquiry that a general ban on borrowing by SMSFs, which was lifted in 2007, be restored. Since 2012, borrowings by self-managed funds has grown from $2.5 billion to $24 billion, of which 91 per cent, or almost $22 billion has been for residential and commercial property.
<div>
"In addition, borrowing by superannuation funds implicitly transfers some of the downside risks to taxpayers, who underwrite adverse outcomes in the superannuation system through the provision of the age pension," his inquiry said.
Mr Shorten said restoring the general ban on borrowing would "help cool an overheated housing market partly driven by wealthy Self-Managed Super Funds".
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<div>"The government has simply ignored this recommendation while housing risks have been building in the economy on their watch," says Labor's policy document, in an advance briefing to the Australian Financial Review.</div>
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"Ignoring this recommendation would also leave the budget more exposed over time.
"This measure will prevent the unnecessary build-up of risk in Australia's superannuation system, reduce future calls on the aged pension as a result of a less diversified superannuation system, and make the financial system more resilient on the face of potential economic shocks." 
What Victoria’s new vacant property tax means to you: Juwai's Gavin Norris
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<div>
Labor will stick with its existing policy of halving the 50 per cent capital gains tax exemption for property investors to 25 per cent and restricting future negative gearing to new homes only.
Labor's plan to double foreign investor fees will result in new charges of between $10,000 and $40,600, depending on the value of the property.
</div>
<div>The new criminal penalties for breaching FIRB rules on residential real estate will be $270,000 for an individual and $1.35 million for a company. The civil penalty will be the greater of either 20 per cent of the purchase price or 20 per cent of the market value of the property. </div>
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Vacancy tax to go national under new Labor tax

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<img src="https://counter.theconversation.edu.au/content/76159/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The federal government is split on whether first home buyers in Australia should be allowed to use part of their superannuation for home deposits.
But what the more strident critics miss is that Australia’s superannuation system already channels a significant proportion of retirement savings into housing.
It does this not via the traditional route of people buying a house outright, but rather through an indirect channel, by transforming the household’s compulsorily acquired superannuation equity into mortgages from commercial banks and other financial intermediaries.
Statistics from the ABS (December 2016) show that for every A$1 of assets managed by the superannuation sector, approximately 27 cents is directly financing Australia’s banking sector. This is via superannuation holdings of bank deposits (14c in the dollar), bank equity (7c in the dollar), and other bank liabilities (6c in the dollar).
What do banks do with this 27c? The ABS reports that 38 percent of bank financial assets are long-term loans to households. We have cross-inspected this data with figures from the Australian Prudential and Regulation Authority (APRA) and found that nearly all of these loans are mortgages.
This suggests that at least 10c of every A$1 of superannuation assets is indirectly financing house purchases via commercial bank debt.
But this also excludes other indirect financing of banks by superannuation. For example, the portfolios of non-money market mutual funds and other private non-financial corporations are also heavily weighted towards funding banks (24 percent and 36 percent of their assets, respectively), and superannuation funds allocate 6 percent and 24 percent of their funds to these agents respectively. This potentially adds a further 4c in every A$1 of superannuation assets that ultimately results in debt financing of housing.
Why using super for housing might be good idea
One of the merits of allowing households to use their superannuation to supplement their housing deposits would be to reduce unnecessary and expensive financial middlemen. Under the present system, the money from superannuation that finds its way into housing finance does so by passing through chains of two or more intermediaries. This means that it incurs management expenses at each step.
The first link in the chain is the superannuation sector (with an average expense ratio of 0.7 percent). Next is one or more financial intermediaries, like banks. A plausible estimate of the banking sector’s expense ratio, by our calculations, is 1 percent to 2.3 percent of bank assets.
Total expenses through the intermediation chain could therefore be as high as 1.7 percent to 3 percent. These expenses might be lower under a housing equity super access scheme.
Another potential benefit relates to the accumulation of debt and its consequences for financial stability.
Most of the money people put away into superannuation, because its compulsory, would have otherwise been used for other types of saving. If you look at the assets in a household’s balance sheet, it is clear that housing equity (representing 65 percent of non-superannuation assets) is the household’s preferred savings vehicle.
It is possible that growth in compulsory superannuation has contributed to growth in household debt in two ways. First, by frustrating people’s ability to finance home ownership through their deposit. Second, by increasing the supply of mortgage finance, as superannuation savings are recycled through the financial system, and converted to mortgages by the banks.
The risks with the plan
One concern about letting people divert money into buying a house is that their income in retirement could suffer as a result. To mitigate the risk of this happening, any policy on this would need to record and track the values of super funds’ home equity stakes (just as super funds presently track values for the traditional assets they hold).
But retirement income is determined by total net assets, not superannuation assets alone. In this context, home ownership provides retirees an important stream of stable tax-free, inflation-protected, income. This is recognised by the Association of Superannuation Funds of Australia benchmarks for “modest” and “comfortable” retirement income.
These assume that retirees own their home outright. So the decline in home ownership is a significant threat to the adequacy of Australia’s retirement income system.
A second risk is that the policy could further raise house prices, reducing affordability and exposing retirement savings to a house price collapse. In the present house price environment, this is a real risk, which would need to be monitored. But the policy’s two main merits (reducing intermediation costs and improving financial stability by reducing gross debt) are long-run benefits that will continue to hold beyond our current point in the house price cycle.
APRA also already monitors risks associated with housing credit growth, and has the tools, and the willingness to use them, should the policy promote undesired house price growth.
There are reasons to expect that a policy allowing first home buyers access to super will not lead to net growth in housing finance. Superannuation funds are already required by APRA to understand their underlying asset exposure risks. So super funds might try to maintain their total exposure to property risk under this policy, for example by reducing their exposure to the banks. 
James Giesecke<a href="https://theconversation.com/profiles/james-giesecke-9853"> </a>is professor, Centre of Policy Studies and the Impact Project, Victoria University and can be contacted <a href="https://theconversation.com/profiles/james-giesecke-9853" target="_blank">here</a>.
Jason Nassios is research fellow, Centre of Policy Studies, Victoria University and can be contacted <a href="https://theconversation.com/profiles/jason-nassios-318488" target="_blank">here</a>.
Both are authors for The Conversation.
 
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jchancellor-FAypfDUnLy

Here’s how superannuation is already financing homes

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GUEST OBSERVER
The release of the Productivity Commission’s Draft Report Superannuation: Alternative Default Models on Wednesday has certainly raised some conjecture across the superannuation industry.
The Report’s recommendations warrant a serious assessment given their potential ramifications for what remains a burgeoning superannuation industry, with a substantial number of funds still co-existing, despite ongoing pressures for consolidation.
SuperRatings notes that the over-arching criteria for assessment and inclusion as a default fund proposed by the Productivity Commission is a focus on net-returns, which SuperRatings has been advocating for many years, via its net benefit modelling. This measures a fund’s net returns after the deduction of all fees and taxes over a 10-year period.
Given the findings closely align to SuperRatings’ existing net benefit modelling, we have analysed the funds that would be likely to sit within the ‘List of 10’ default funds, assuming a key focus on net returns, under the Productivity Commission’s proposed multi-criteria tender model. These funds are, in alphabetical order:
<a href="https://www.propertyobserver.com.au/images/2017/04/4/po%202.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/4/po%202.jpg" width="600" height="579">
 
 
Based upon SuperRatings net benefit modelling, the above funds have the highest net investment returns over a 10-year period and hence, would be included based on a pure net investment performance measure.
As can be seen from the above table, each of the top performing funds on a net return basis is a Not-for-Profit fund, suggesting that the Retail Fund sector may continue to struggle to be named as defaults, unless a broader assessment of measures is utilised.
SuperRatings CEO, Adam Gee, commented “Whilst we remain supportive of the Productivity Commission’s broader intentions, limiting a default list to only 10 funds will result in some outstanding value for money funds missing out on default fund status, which may sound the death knell for many of these, despite delivering excellent outcomes for their members”.
RECOMMENDATIONS VERY SIMILAR TO THE NZ KIWISAVER MODEL
Through its research and ratings of the NZ KiwiSaver system, SuperRatings recognises substantial similarities between the recommendations contained within the Productivity Commission report, particularly in respect of Model 3 – the multicriteria tender.
This includes the Productivity Commission’s suggestion of using the Australian Taxation Office as a centralised clearing house. The New Zealand equivalent, Inland Revenue Department, currently provides this service for contributions to be made by employers, which are then distributed to each of the relevant KiwiSaver schemes. This process also ensures (with legislative support) that only a single account can be created for an individual during their lifetime, removing the multiple account issue that continues to be problematic within the Australian system. Similarly, the KiwiSaver model moved towards a limited model for default contributions in 2014, via a selection process, in which nine of the approximate forty schemes available in the market at the time, were authorised as default providers.
SuperRatings believes that the KiwiSaver system remains one of the most efficient markets, particularly in relation to its operational and administrative processes. Referring to SuperRatings’ 2016 ratings of the KiwiSaver market, Mr Gee said “We continue to rate the KiwiSaver market highly in comparison to the other global retirement systems, with strong levels of member engagement and investment choice evident, underpinned by very cost effective operating models.”
Evidencing the efficiency of the KiwiSaver market and streamlined nature of its contribution and membership flows, SuperRatings research noted that a comparison of operating costs between NZ and Australia showed material differences. Based upon SuperRatings “Cost per Member” calculation (which effectively normalises the operating costs to an annual per member basis), the annual cost to a fund to operate a KiwiSaver member sits at slightly less than $60. This is in stark contrast to the average cost per member within Australia of $255, suggesting there may be some merit in the NZ model.
A REASONABLE START BUT A BROAD ASSESSMENT NEEDED
Whilst SuperRatings believes there is already a reasonable level of competition evident in most sectors of the superannuation marketplace, it also recognises that any changes that introduce greater competition into the market and provide members with better retirement outcomes can only be positive.
That said, SuperRatings does recognise that the initial assessment criteria proposed by the Productivity Commission remains limited. Mr Gee further commented that “the exclusion of insurance from the assessment is fraught with danger, given the important role it continues to play within superannuation and the community more broadly”.
In line with its value assessment of a superannuation fund, SuperRatings continues to believe that a broad assessment of quality is required in order to select a default superannuation fund. This must include an assessment of a range of underlying metrics in respect of investments, fees, insurance, member servicing/advice, administration and governance, to ensure that every facet of a superannuation fund’s offering can be appropriately interrogated.
SuperRatings looks forward to continuing to assess the outcomes of the Productivity Commissions Draft Report and will continue to engage in the consultation process.
 
Adam Gee is the CEO of SuperRatings and can be contacted <a href="https://www.superratings.com.au" target="_blank">here</a>.
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Productivity Commission findings no windfall for retail funds: Adam Gee

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The prospect of allowing young people access to their superannuation for a home deposit has been previously dismissed by Malcolm Turnbull as a “thoroughly bad idea”.
But I don't think it ought be ruled out. 
It needs consideration as proposals to alter negative gearing and capital gains tax arrangements do nothing to help first-home buyers obtain their deposit.
There are some wise MPs pushing Treasurer Scott Morrison to allow indirect access to assist buyers onto the property ladder.
There are those against the plan, warning it would drive up housing prices and that allowing first-home buyers early access to super will set back a retirement income system that is still struggling to fully ­deliver. 
Ofcourse currently a household in difficulty with their mortgage has the chance to access superannuation to clear arrears sometimes, whereas a first home buyer in an otherwise good financial condition cannot temporarily access their super for a deposit.
The ­proposal was dismissed by Turnbull when floated by ­former treasurer Joe Hockey in 2015.
Financial advisor Daryl Dixon recently said the Australian government should look at the New Zealand access via KiwiSaver super accounts.
Dixon noted for many Australians without access to parental help, being granted partial or full access to their compulsory super accounts provided their best chance to obtain a deposit to gain entry to the housing market.
The New Zealand scheme sets limits on the value of the house and income of the purchasers.
Australian super funds may object to losing funds under management, but the suggestion is the use of mortgage offset account facilities provides an effective means to ensure that the money used as a house deposit is not lost to the super system.
The money invested in the offset account would remain the property of the super fund with the income from the offset account reducing the cost of servicing the mortgage.
For the government the annual cost would be limited to the loss of the 15 percent income tax that would otherwise be collected on super fund earnings.
Dixon suggested safeguards could limit use of the super fund mortgage offset account to 10 years by when inflation and mortgage repayments have built up the house owners’ equity. 
The Australian government could also look at Canada’s Home Buyer’s Plan where Canandian first home buyers can withdraw up to $25,000 from their super with funds repaid within 15 years.
Yes redirecting members super balances early in their contribution cycle will hurt the compounding effect of returns and lead to lower retirement balances. 
But Generation Y have been accruing more debt at an earlier age than any of their predecessors. With 40 percent of 18- to 35-year-olds with a study-related HECS debt, this generation are already on the back foot before they have even begun their careers.
This article first appeared in the Saturday Daily Telegraph.
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Allowing first home buyers to access their super to buy a house 

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<img src="https://counter.theconversation.edu.au/content/74841/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Lots of ideas are being thrown about: the test for the Treasurer is to sort the good from the bad. Reports that the government was again considering using superannuation to help first homebuyers won’t inspire confidence.
It’s not the first time a policy like this has been floated within government. While these latest ideas to use super to help first homebuyers are marginally less bad than proposals from 2015, our research shows they still wouldn’t make much difference to housing affordability.
A seductive idea with a long history
Allowing first homebuyers to cash out their super to buy a home is a seductive idea with a long history. Both sides of politics took proposals to the 1993 election, before Prime Minister Paul Keating scrapped it upon his re-election.
Former Treasurer Joe Hockey last raised the idea in 2015 and was roundly criticised, including by then Coalition frontbencher Malcolm Turnbull.
Politicians are understandably attracted to any policy that appears to help first homebuyers build a deposit. Unlike the various first homebuyers’ grants that cost billions each year, letting first homebuyers cash out their super would not hurt the budget bottom line – at least, not in the short term. But as we wrote in 2015, that change would push up house prices, leave many people with less to retire on, and cost taxpayers in the long run.
Having learned from that that experience, the government has instead flagged two different ways to use super to help first homebuyers. Neither proposal would make the mistake of giving first homebuyers complete freedom to access to their super. But nor would they make much difference to housing affordability.
Using voluntary super savings for deposits
The first proposal reportedly supported by some in the Coalition, but now denied by the Treasurer, would allow first homebuyers to withdraw any voluntary super contributions they make to help purchase a home. Any compulsory Super Guarantee contributions, the bulk of Australians’ super savings, could not be touched.
Using super tax breaks to help first homebuyers build their deposit would level the playing field between the tax treatment of the savings of first homebuyers and existing property owners.
First homebuyers’ savings typically sit in bank term deposits, where both the initial amount saved and any interest earned is taxed at full marginal rates of personal income tax. In contrast, the nest eggs of existing property owners are taxed very lightly. For owner occupiers, any capital gain is tax free. For investors, capital gains are taxed at a 50% discount, and they get the benefit of negative gearing.
But even if there’s some merit in allowing first homebuyers to use super tax breaks to save for a home, it’s unlikely to make much difference. Few people are likely to take advantage of the scheme. Households are reluctant to give up access to their savings, especially when they’re already saving 9.5% of their income via compulsory super.
In fact the proposal works out to be very similar to the former Rudd government’s First Home Saver Accounts, and is likely to be just as ineffective. First Home Saver Accounts provided similar financial incentives to help first homebuyers build a deposit. Treasury expected A$6.5 billion to be held in First Home Saver Accounts by 2012. Instead only A$500 million had been saved by 2014, when Joe Hockey abolished the scheme, citing a lack of take up.
A “shared equity” scheme for super funds
The Turnbull government is reportedly also considering a “shared equity scheme” where workers’ super funds would own a portion of the property investment, and money would presumably be returned to the super fund when the property was sold.
Details are scarce, but the proposal raises several questions.
First, would the super fund use only the super savings of the co-investor to help buy the home, or would they add capital from the broader super fund pool?
Second, how would the super fund generate a return on the investment? A super fund that invests in rental housing gets the benefit of a rental income stream. A super fund co-investing in owner-occupied housing would not. The super fund could take a disproportionate share of any capital gains to compensate, but that hardly seems attractive for the funds in a world where interest rates are already at record lows.
Third, why involve super funds in a shared equity scheme in the first place? Australia’s super sector is already notoriously inefficient – total super fund fees equate to more than 1% of Australia’s GDP each year. A shared-equity scheme would inevitably add to super funds’ administration costs.
If the federal government is serious about super funds investing in housing, it needs to encourage wholesale reform of state land taxes, which levy a higher rate of land tax the more investment property a person owns. This discourages institutional investors such as super funds from owning large numbers of residential properties, because they pay much higher rates of land tax on any given property than a mum-and-dad investor.
<a href="https://www.propertyobserver.com.au/images/2017/03/22/image-20170320-8871-1gu0bul.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/22/image-20170320-8871-1gu0bul.jpg" alt="">
Focus on what matters
If Scott Morrison really wants to tackle housing affordability, he can no longer ignore those policies that would make the biggest difference. That means addressing both the demand and the supply side of housing markets.
On the demand side, that means reducing government subsidies for housing investment which have simply added fuel to the fire. Abolishing negative gearing and cutting the capital gains tax discount to 25% would save the budget about A$5.3 billion a year, and reduce house prices a little - we estimate they would be about 2% lower than otherwise.
The government should also include the value of the family home above some threshold – such as A$500,000 – in the Age Pension assets test. This would encourage senior Australians to downsize to more appropriate housing, while helping improve the budget bottom line.
At the same time the government should support policies that boost housing supply, especially in the inner and middle ring suburbs of our major cities where most of the new jobs are being created. Population density in the middle ring has hardly changed in the past 30 years.
The federal government has little control over planning rules, which are administered by state and local governments. But it can provide incentives to those tiers of government, if it is looking to do something that would really improve home ownership.
While there are plenty of ideas to improve affordability, only a few will make a real difference, and these are politically hard. In the meantime, the latest thought bubbles about using super savings for housing might be less bad than in the past, but they would be just as ineffective.
John Daley is Chief Executive Officer, Grattan Institute and can be contacted <a href="https://theconversation.com/profiles/john-daley-1870" target="_blank">here</a>. 
Brendan Coates is Fellow, Grattan Institute and can be contacted <a href="https://theconversation.com/profiles/brendan-coates-154644" target="_blank">here</a>. 
Both are authors for The Conversation.
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The latest ideas to use super to buy homes are still bad ideas

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GUEST OBSERVER
The Howard government, when flush with revenue, made a bad tax decisions which continue to haunt current policy makers.
It removed the tax on the retirement phase of superannuation, this has been partly resolved by current government’s recent changes. But the Howard government also replaced the full taxation of real capital gains with concessional treatment of capital gains (only 50 percent of gains taxed). This remains as a tax avoidance loophole which both parties acknowledge but are reluctant to act upon.
The reason is straightforward. Assets put into superannuation in the accumulation phase and held until the retirement phase, can then be sold with no, or minimal, capital gains tax payable. This a major incentive to put assets into super and hold them until the retirement phase.
Without further changes to superannuation taxation, this is simply going to worsen the social problem of the well-off adopting tax minimisation strategies by piling as many assets into super as possible. Remember, it will still be possible to contribute up to A$100,000 per annum as non-concessional contributions.
Consequently, the well-off could easily build up a pool of assets of several million dollars or more, which when sold in retirement will still get very, very, favourable capital gains tax treatment under super.
If superannuation assets in retirement are under the A$1.6 million cap, no tax will be payable on capital gains from sales of assets. If assets are above the cap, the tax rate applied to capital gains is 10%.
For example, an asset costing $100,000 and held for 15 years, increasing in price at an average of 7% per annum would be sold for $276,000. If in super, tax payable would be $17,600. If outside of super, on the top marginal tax rate (including levies) of 49%, the tax payable would be $43,096.
If the concession on capital gains tax was reduced (without addressing the concessionary rate in super), the incentive would be even bigger. For example, if the concession was reduced to 25%, tax payable on the capital gain outside of super would be $64,644, an even larger gap to the tax payable in super of $17,600.
Putting $100,000 per annum into super for 15 years with an average 7% capital gain per annum generates a portfolio worth $2.7 million. The capital gains tax savings on this being in super, rather than outside, are more than $1 million!
So, what are the consequences if a brave government elects to reduce the concession applied to capital gains tax? If they make no changes to super tax arrangements there are at least two likely consequences.
First, there is increased incentive for individuals to set up self managed super funds to exploit these tax arbitrage or minimisation loopholes.
Second, despite taxation of earnings on retirement income balances over the A$1.6 million cap, maximising non-concessional contributions into self managed super funds will remain attractive, to take advantage of the difference in capital gains tax rates on assets inside versus outside super – to the detriment of future government budgets.
The consequences for self managed super funds incentives to borrow (via non-recourse arrangements involving trusts) to purchase assets such as property are unclear. As described on one adviser’s website:
Such borrowing will enable trustees to acquire assets over and above the assets that can be obtained from contributions. The caps on contributions can therefore be “overcome” by such borrowings.
However, it is doubtful that there are tax arbitrage benefits from using leverage to purchase assets via super (because higher marginal tax rates mean higher tax deductions for interest on borrowings outside of super).
For reasons of social equity, any general changes to the capital gains tax rate will also need to address capital gains tax within super. Admittedly there is already a lower concession in the case of super (two-thirds of gains are taxed versus one-half).
But that means taxing capital gains in super at only a 10 percent rate, leaving strong incentives to thwart higher capital gains tax by locating assets within super. Failing to reduce the capital gains tax concession in super would be likely to undo a substantial part of the effectiveness of any general changes the government has already made.
Kevin Davis is research director of Australian Centre for Financial Studies and professor of Finance at Melbourne and Monash Universities, Australian Centre for Financial Studies and author for The Conversation.
He can be contacted <a href="https://theconversation.com/profiles/kevin-davis-3497" target="_blank">here</a>.
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