Trustee urges review of super borrowing
Financial System Inquiry chair David Murray is being encouraged to consider allowing “struggling Australians” to draw on their super to assist with purchasing their first home.
In a submission to the inquiry, SMSF trustee Henry Detjen said it was “puzzling” why the FSI had not addressed the idea of allowing first home buyers to draw against their superannuation to assist with the “frightfully expensive” cost of housing.
“One major issue not addressed anywhere, and I find puzzling, is that I believe a person should be able to draw on their superannuation contributions to assist them in purchasing their first home,” Mr Detjen said.
“Housing, we all know, is frightfully expensive in Australia, particularly in the capital cities, but is still difficult for those in regional Australia where incomes are lower,” he said.
“Young people struggle to save for a home deposit yet they are contributing for years to their super and they cannot access these funds.”
Mr Detjen also said there would need to be a number of rules managing how people draw on their super, including not being able to borrow more than 80 per cent of the property value.
“If they sell the home, the money, as a proportional amount, goes back to their super. If they originally drew out 10 per cent of the price of the property from super, then 10 per cent of the sale goes back to their superannuation,” he said.
In a statement released in July, independent Senator Nick Xenophon proposed legislative changes that would allow first home buyers to access their super to assist in buying their first home.