Superannuation lurks and perks are now so large they are nearing the entire cost of Australia’s aged pension, and Budget 2022 adds just a little bonus to the suite of Baby Boomer bonuses.
This Budget has very little in the way of super-related announcements. In fact the extension of the Downsizer Super Contribution to those aged 55 – 59 is about the only super measure of any significance in the whole Budget.
And yes, by far the cohort with the highest ability to shelter wealth in low-taxed super from this initiative will be wealthier property owners who can now, from age 55 onwards, move up to $600k a couple into super tax-free (it is effectively after-tax so called ‘Non Concessional Contributions) on top of the regular $110,000 NCC limit per person per year, says financial adviser Harry Chemay.
The question will be ‘how much equity can actually be released, after buying a new (presumably smaller) dwelling?’ Many of these new luxury apartment complexes aimed at wealthy empty nesters tend to be just as expensive as free standing houses in blue ribbon suburbs, so the ‘changeover cost’ will be the key determining factor in how much goes into this extended super lurk.
“I guess you could always sell the Paddington terrace and move to the coast or up the central tablelands, but not sure how many wealthy retirees will actually take advantage of this measure,” says Chemay.
Here is our take on the monster which has become a giant tax shelter for wealthy Australians, not merely funding their retirements but bequeathing the publicly subsidised wealth for their future generations.
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.