practical living
Downsize push
Older Australians are being encouraged to free up housing for younger families .
By NCA NewsWire
Pensioners are being encouraged to downsize to free up larger homes for younger families under a proposed new law .
A bill has been introduced to federal parliament which would give age pension recipients an extra year before the proceeds from the sale of their homes affect their pension payments .
Federal Labor said the asset test exemption was aimed at giving people more time to purchase , build or renovate a home .
Ray White chief economist Nerida Conisbee told NCA NewsWire the incentive was in addition to the downsizer superannuation benefit , which allowed older people to put up to $ 300,000 into their super using the money from the sale of their main residence .
“ While it is difficult for families to find big enough homes , particularly in desirable suburbs , the capacity in existing homes is high ,” she said .
“ It is estimated that there were around 13 million spare bedrooms in Australia , with many older people living in homes with several spare bedrooms .”
But Conisbee said financial hurdles were not the only obstacles keeping older people in big homes .
“ There are also challenges for many to find more suitable smaller homes and of
course , there is the emotional attachment so many have to where they live ,” she said . “ Nevertheless , reducing the financial burden of downsizing should go some way to encourage people to move .
“ It may not lead to a flood of properties entering the market , but we should see an uptick .”
Data on population by age group by suburb was recently released by the Australian Bureau of Statistics .
It provided details on where the most people aged 65 and older live , which Conisbee said indicated where any downsizer incentives would provide the biggest uplift in availability of family homes .
“ While some suburbs may contain a lot of older Australians because there is a retirement community or aged care facility , the mix of where the most 65 plus years residents are is an interesting mix ,” she said .
“ It includes some very desirable suburbs such as Glenelg in Adelaide , Sandy Bay in Hobart and Brighton in Melbourne , where there are likely lots of families keen to settle into big family homes .”
Propertyology ’ s head of research , Simon Pressley , told NCA NewsWire the Labor government had come up with a good initiative , but there were some challenges to getting older people to give up a home they had lived in for a long time .
“ Let ’ s say there ’ s a family with a couple of kids … wanting to buy that traditional
“ The incentive
needs to be bigger .
middle ring home , but they ’ re more located a lot further out of town and they don ’ t want to live there ,” he said .
“ Then you ’ ve got the traditional empty nesters , who have got this big home … I think the idea of the policy is to create an incentive to get people thinking about something that they wouldn ’ t otherwise think about .
“ It ’ s a good policy , but if they really want it to work , the incentive needs to be bigger . People don ’ t move homes on a daily , weekly , annual basis . They ’ re attached to it .” Pressley said the policy was targeting people in the second half of their life , who had achieved a lot and they did not need to move .
“ If you want them to move , you need to make it absolutely worth their while to even think about , let alone to actually action it ,” he said .
Pressley said it was a drop in the ocean to get a couple of hundred people to take advantage of such a policy .
Some elderly people might also be holding onto their properties so their children could inherit it one day . Pressley said the policy could include an additional carrot for those people .
“ Rather than saying if you sell you can do X with X amount of money and we won ’ t tax you , as an alternative suggestion , try to tie the incentive to say we ’ ll allow you to gift some money to your children without taxing them ,” he said . ■
24 agedcareinsite . com . au