This year's federal budget contained some good news for hard-pressed people saving up to buy their first home.
First homebuyers will welcome the fact that they can now put part of their pre-tax income into their superannuation fund where it can go towards a deposit for a home.
From July 1 2017 individuals can put a total of $30,000 into their super fund, or up to $15,000 per year. Couples can put up to $60,000 into super. From there they get the benefits of growing that nest egg until it's time to withdraw it for their home deposit.
It's a welcome move from the federal government, which has also chosen to leave the rules on novated leasing alone for the foreseeable future. It's a decision that should be welcomed by anyone enjoying the benefits of a novated lease.
That new homebuyer's incentive and novated leasing are two good reasons for ordinary wage earners to take a good long look at the advantages of salary sacrificing.
Salary sacrificing explained
So what exactly is salary sacrificing? Well in simple terms, you arrange for your employer to salary package your income so that they pay some of your bills, or in this case make a super contribution, from your salary. Your tax liability will be reduced, leaving you with more disposable income.
If salary sacrificing sounds like a great strategy to you, well you're not wrong. The benefits of superannuation really mount up over the years, so the earlier you get into the habit of salary sacrificing and squirreling a little more away into your super account the better.
Salary sacrifice your next car
Superannuation is just the start of the benefits available to you when you start salary sacrificing. You can also use salary sacrificing to get yourself a car through a novated lease. By doing that you take the total cost of running a vehicle out of a combination of your pre and post -tax salary – that's finance, insurance, fuel and maintenance.