Downsizing.com.au CEO, Amanda Graham welcomed new Prime Minister Anthony Albanese and newly elected MP’s, including the cross-bench and Greens MP’s, saying she looked forward to ongoing consideration of the needs of Australia’s downsizers.
“Often overlooked in housing policy debates, this demographic which includes the baby boomer generation holds the majority of Australia’s wealth in their current home equity.”
“There are 8 million Australians aged 50 and over, with around one third of these already actively considering downsizing their home to free up wealth, fund their retirement years, improve their lifestyle and even help their adult children buy a home of their own.”
“This represents a very significant proportion of the population holding a large percentage of the stock in our residential housing market, which could be more efficiently utilised. If these people are incentivised to sell their home and buy something better located and suited to their life stage, this could potentially free up a lot of housing stock for younger, growing families.”
She said that downsizers aged over 55 will soon be able to access incentives to “rightsize” their home, under a new bi-partisan agreement to be implemented on 1 July 2022.
“But there has been a lot of talk about helping first home buyers during the election campaign, and I want to ensure the implications of downsizing activity is also adequately considered in these current policy discussions.”
Details of the change, already agreed to by both major parties during the election campaign, include:
- The age of which Australians will be able to downsize their property and invest up to $300,000 per person ($600,000 for couples) from the proceeds of sale into their superannuation fund. Current contribution caps, now set at age 65, and due to be lowered to age 60, will now be lowered to age 55 years.
- Pensioners who downsize will also be given a two-year grace period before the proceeds of sale of the property are subjected to asset testing for the pension. It is intended for this grace period to give Australians time to get their finances in order while still receiving the pension.
The Property Council of Australia said this was a significant advocacy win after ongoing engagement with both major parties on this issue. They welcomed the change, and said there is also a need for broader action on housing supply, especially to encourage the supply of purpose-built age-friendly communities, to ensure Australians have more affordable and accessible choices.