Pensioners have been given an additional four months to claim stamp duty discounts worth up to $7,000, if they downsize in Tasmania.
The Tasmanian Government’s downsizing incentive was due to finish on 9 February. However, on 16 January, the government announced it was extending the incentive until 30 June 2019.
Under the incentive, pensioners who sell their Tasmanian home by 30 June, and downsize into another property in the State with a lesser value worth under $400,000, are able to earn a 50 per cent stamp duty discount.
To be eligible, pensioners must sell the former home by 30 June, and settle on the new home within six months.
There are a number of other terms and conditions, so it is well worth checking out the detail.
The Tasmanian Government introduced the incentive in February 2018 to support seniors to move into more suitable accommodation, and by doing this free-up the supply of larger family homes into the real estate market.
Tasmania’s Treasurer Peter Gutwein confirmed to Downsizing.com.au that, as of 31 December 2018, some 149 pensioners had received a stamp duty concession. The average stamp duty cut received by these pensioners was $4,673.
Mr Gutwein said “there has been a positive response to the pensioner downsizing initiative”.
However, Mr Gutwein also confirmed that “on a pro-rated basis the take-up rate of the concession has been down on the original Budget estimate, which has enabled us to extend the scheme to 30 June.” The Tasmanian Government had allocated $1.9m to the scheme in its 2018/19 Budget.
Mr Gutwein stated that no decision had been made on whether the scheme would be extended past 30 June 2019. “All initiatives, including the pensioner downsizing initiative, will be considered further through the budget process,” he said.
While it’s hard to know exactly why spending on the incentive is under budget, one possible reason is the somewhat miserly $400,000 price limit. This amount is well under Greater Hobart’s average house price of $495,000 (which is up 15 per cent in a year).
Along with the Australian Government’s superannuation downsizing incentive, the Tasmanian Government scheme is one of the few government downsizing incentive schemes in place in Australia.
Downsizing.com.au sought feedback on the incentive from the Tasmanian arm of the Property Council of Australia, but did not receive a response in time for our deadline.
Given its great climate and environment and relatively affordable housing, Tasmania is increasingly regarded as one of Australia’s downsizing hotspots.
By Mark Skelsey, News Editor of Downsizing.com.au