Downsizers will be able to access a $25,000 Australian Government grant to buy into newly-constructed retirement villages and other property such as apartments, villas and townhouses, it has been revealed.
In addition, four States and Territories have announced a range of home construction grants and stamp duty reductions which can be used in conjunction with the Australian Government's grant.
Below is our analysis of the situation:
Australian Government’s HomeBuilder scheme
On 4 June, the Australian Government announced its much-hyped HomeBuilder scheme which provides eligible owner-occupiers with a grant of $25,000 towards a newly-built home or to help substantially renovate an existing home.
The good news is that the scheme, unlike so many housing stimulation schemes before it, is not just targeted at first home buyers.
This means it can be used by older Australians, who already own their home but are looking to fund the construction of a new home to occupy, or upgrade their existing home.
What was made clear on 4 June is that the scheme can potentially be used by a downsizer who wanted to buy a new off-the-plan general apartment, or a new duplex, villa or townhouse, which was about to be constructed.
However, things really got interesting on 18 June when the government posted updated frequently asked questions on its website.
This new information confirmed that the $25,000 grant could be claimed if the grant applicant's name is on the certificate of land where the new home would be built.
According to the Retirement Living Council's executive director Ben Myers, the new information effectively confirms that purchasers of a strata retirement village unit, or a leasehold retirement village unit in all States but Victoria, could also be eligible to claim the grant.
Importantly, this can't be an existing retirement village unit - it would need to be one which began construction after at least 4 June.
In addition, unfortunately, the land certificate compliance step - at least for now - means that the grant can't be used to help with the purchase of new homes in land lease communities, nor for granny flats.
Mr Myers said it is welcome that the government has made it clear that retirement property is covered by the HomeBuilder scheme.
"The good news here is that the Australian Government has valued the importance of retirement living," Mr Myers said. "It has, to date, however set a fairly high eligibility and compliance bar, for people to be able to access the HomeBuilder grant.
"We will continue working with the Australian Government on this issue."
Details of how to apply for this grant will be soon be available through State and Territory revenue office websites.
Tasmanian downsizer stamp duty scheme extended
In March, the Tasmanian Government announced an extension of its downsizing stamp duty concession for a further two years.
The scheme was due to end on 30 June 2020 - it now has a targeted end date of 30 June 2022.
Through the incentive, pensioners have the opportunity to claim a 50 per cent stamp duty discount worth up to $7,000 if they sell their family home in Tasmania and downsize into another existing home in the State with a lesser value..
The downsizer must live in the home for at least six months.
While it is good news that the Tasmania Government has extended the scheme, unfortunately it hasn’t increased the $400,000 price threshold to take into account rising real estate values.
This means that, based on median real estate values across Tasmania, the scheme would be most likely to be used to buy attached properties - such as apartments - in all parts of the State, or existing houses in regional areas but not in Hobart.
Hobart’s current $540,000 median house price (as of March 2020) would mean it would be tough to find an established house for $400,000 or under.
Tasmanian home builder scheme
Tasmania has also announced a $20,000 HomeBuilder grant, which applies to the construction of new homes (but not renovations and extensions).
This means that, combined with the Australian Government’s scheme, applicants may be eligible for a $45,000 grant for building a new home in Tasmania, if they sign the contract before 31 December and are below the income threshold.
To be eligible, the new home must be fixed to the applicant’s land (which rules out tiny houses or other moveable homes located in land lease communities). In addition, it can’t be a pre-built home imported into the property (such as a manufactured home).
The applicant needs to occupy the home for a continuous period of six months, and also retain ownership of the property.
Australian Capital Territory stamp duty discounts
On 4 June, the Australian Capital Territory announced it will cut stamp duty by up to $11,400 for owner-occupiers who buy new single residential blocks, or off-the-plan apartments and townhouses.
This concession will be in place until 30 June 2021, and have a price threshold of $750,000.
“These measures will save new home buyers thousands of dollars whether they are entering the housing market for the first time, or looking to move,” said ACT Chief Minister Andrew Barr.
Separately, the Government has also announced it has extended the Pensioner Duty Concession Scheme by one year (the scheme was due to finish on 30 June 2020).
This scheme provides a full or partial stamp duty concession to pensioners purchasing a property valued below the median property value. Stamp duty deferrals will also be extended to all pensioners, regardless of property value.
Western Australia home builder grants and stamp duty reduction schemes
Western Australia has unveiled what is arguably the most generous scheme of any State, offering $20,000 grants to people who enter into contracts to build new homes and extending its stamp duty reduction scheme for off-the-plan apartment purchases.
Under the State’s $125 million Building Bonus package, a $20,000 grant is available for eligible applicants who enter into a contract to build a new home, or purchase a new “single-tier” property, such as a townhouse.
The grant is available until 31 December 2020 and can be used in conjunction with the Australian Government’s HomeBuilder scheme.
Separately, $8.2 million has been allocated by the WA Government to expand the existing stamp duty rebate scheme for off-the-plan apartment purchases.
The extension means downsizers should be able to get a stamp duty reduction of up to $25,000 if they buy a new apartment, and the apartment is under construction.
Until now, a stamp duty rebate has only been able to be collected if the purchase was made before construction had commenced. This potential $50,000 rebate - announced last October - remains in place.
Both of the above WA Government schemes have the potential to be used by downsizers who are looking to leave the family home and move into a smaller property, such as a townhouse or apartment.
Queensland regional homes grant
On 16 June, the Queensland Government announced a $5,000 Regional Home Building Boost grant, which can be used by older Australians if they are purchasing or building a new home in parts of regional Queensland.
The scheme will apply to popular downsizer hotspots such as Toowoomba, Cairns, Townsville and Wide Bay (Bundaberg), but unfortunately not to South-East Queensland including the Sunshine Coast, Gold Coast or Moreton Bay regions.
As part of the scheme, the home must be valued at $750,000 or less, and be occupied by the applicant.
A Queensland Treasury spokesperson said further details as to whether the scheme would apply to retirement villages or land lease communities would be released before the end of June 2020.