Canberra house prices vs. your parents’ unused super: Let’s talk
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Let’s be honest—watching the people you love struggle with money is tough. If your parents are sitting comfortably in retirement while you’re stressing about Canberra’s $1,000,000+* house prices, there’s probably been some careful conversations about “helping out.”
Maybe they’ve offered. Maybe you’ve hinted. Maybe everyone’s just dancing around the elephant in the room while you scroll through AllHomes, knowing that even a modest three-bedder in Belconnen is slipping further out of reach.
Here’s the thing: your parents can help without compromising their own financial security, and Australia’s tax system makes this doable because there are no gifting taxes, no limits, and plenty of smart strategy options.
Why now makes sense (for everyone)
If your parents are taking a pension from their super—perhaps from a generous public service defined benefit scheme —but not spending all of it, that money is likely sitting idle not earning much interest. Meanwhile, you’re in your prime earning years but can’t get ahead because everything costs so much more.
The magic of early money: That $50,000 they give you now invested in a diversified portfolio with a 7% annual return, could grow to $200,000+ over 20 years. That’s the difference between owning in Belconnen or being priced out of Canberra entirely.
Timing matters: A $50,000 gift at age 25 could grow to nearly $600,000 by age 65 (assuming a 7% annual return). Wait until age 35, and that same gift only grows to around $300,000. The earlier the help, the more powerful the compounding effect.
Beat the super tax: If your parents have substantial super balances, the proposed Division 296 tax could take a significant bite. Strategic gifting may help to redistribute their wealth before the new rules kick in.
How smart parents are helping
Supercharging your super
This is where the real opportunities lie. Your parents can chip in to help you maximise your super – Australia’s tax-effective wealth-building vehicle:
- Concessional contributions: $30,000 annually (including employer contributions). For someone earning Canberra’s average public service salary of $100,000, parents funding additional contributions could save $4,500+ in personal tax.
- Catch-up contributions: Up to 5 years of unused concessional contribution cap can be carried forward if your super balance is under $500,000.
- Non-concessional contributions: $120,000 per year, tax-free going in. Would work well for larger gifts or early inheritances.
- Spouse contributions: Perfect if you’re working part-time or on maternity leave
If you’re earning a salary of $100,000 in Canberra, maximising these contributions solo is challenging. But with parental support? It’s achievable.
Property deposit support
With the changes to the Home Guarantee Scheme taking effect from 1 October — parental support could be the final piece that helps first-time buyers get over the line. Consider:
- Enough for a 5% deposit (or 20% if not eligible for the Home Guarantee Scheme)
- Renovation funds for those solid but dated homes in Yarralumla or Forrest
- Extra funds to reduce your repayments, freeing up cash flow for other investments
Investment opportunities
If you’ve maxed out your super, consider ways they can help you diversify in a tax efficient way:
- Share portfolios through family trusts
- Investment bonds for flexible growth
- Even funding that postgraduate degree at ANU that’ll boost your earning power
The tax-smart approach
Timing is crucial. If your parents need to sell assets to fund gifts, spreading sales across financial years minimises capital gains tax. Otherwise, waiting until they’re 60+ for tax-free super withdrawals is ideal.
Getting professional help
If you’re dealing with public service employment, security clearances, or the unique rental market dynamics in Canberra, you’ll need local experts who understand these complexities.
Consider having a team of experts, including:
- Financial advisers who understand public service salary structures and super options
- Tax specialists familiar with Canberra’s property market dynamics
- Estate lawyers experienced with ACT regulations
The investment in professional advice pays for itself when you avoid costly mistakes or missed opportunities.
Start the conversation
Your parents want to see you thrive, not just survive. In a city where the average income is over $113,000** but house prices demand significantly more, strategic family support isn’t just helpful—it’s often necessary.
But this isn’t about entitlement or handouts. It’s about intelligent family financial planning that recognises today’s economic reality is vastly different from previous generations.
The conversation might feel awkward, but the alternative—watching you struggle while they have surplus—is harder for everyone involved.
Understand their capacity, share your goals, and create a plan that works for both generations. Because the best time to help was yesterday. The second-best time is now.
