The retirement living industry has accused the Australian Government of back-tracking from initial hopes that downsizers moving into newly-built leasehold retirement villages would be eligible for $25,000 HomeBuilder grants.

On 18 June, the Australian Government published a frequently asked questions (FAQ)  document which indicated that purchasers of long-term leasehold retirement villages would be eligible for the grants

This is because the FAQ stated that grants would be given if the claimee could prove their name would be on the property title - as is the case with long-term leasehold retirement villages in all States apart from Victoria.

However, since that time, the FAQ has been updated twice in relation to retirement property.

The second of these changes, on 23 July, stated that not only should a person’s name be on the property title, but they also must be the “registered proprietor” of the land. 

According to the retirement living industry, this excludes leasehold retirement villages, as the community operator generally remains the ongoing and underlying proprietor of the land.

This same FAQ change also removed all mention of retirement villages from the document - an unhelpful move given the significant public interest in whether HomeBuilder could be used when moving into a village.

The change brought a furious response from the Retirement Living Council, which represents the retirement living industry.

“While the re-emergence of COVID-19 risks has seen the Victorian and NSW governments engage much more closely with industry, the Federal government has once again slammed the door on support for retirement living,” the organisation said in its July 2020 newsletter.

“Even though every retirement living resident saves government an average of $12,600 a year through reduced health and aged care costs, the Federal government has decided that downsizing to a new build home in a retirement community is not worthy of support through the HomeBuilder initiative.

“This is obviously a very short-sighted and disappointing outcome that will not only see government miss out on additional health and aged care savings, it will mean that a whole range of additional economic multipliers triggered by a move to retirement living are not realised, especially at a time when they are needed most in the economy.”

In a response provided to Downsizing.com.au, the office of Australian Housing Minister Minister Michael Sukkar was standing by its guns and claiming nothing had changed.

“HomeBuilder is specifically targeted at owner-occupiers and there have been no changes to the rules of the programme since its announcement,” a spokesperson for the Minister said.

“Owner-occupiers who wish to purchase in a retirement village, where they are listed on the title, are eligible for a grant.”

“This is an important integrity measure to ensure only genuine owner-occupiers receive support and that a maximum of one grant is issued per owner-occupier.”

The only thing which seems certain is that downsizers moving into freehold retirement villages, or general property such as houses or apartments, are eligible for HomeBuilder (if all the scheme’s other requirements can be met).

Buyers in land lease communities and occupiers or builders of granny flats were specifically excluded from the scheme in June.

Comment

The application of the HomeBuilder scheme to retirement property has been a shambles.

Three FAQ changes - relating to retirement living - within the space of a month has left consumers and the industry in a state of confusion and anxiety. This is unacceptable.

Even today, the FAQ does not refer to the different retirement living types and then clearly explain whether and how the grant is applicable to these property categories. This in turn shows a lack of understanding in Canberra when it comes to retirement living.

However, the above situation also underlines the extraordinarily complicated legislative environment for retirement living across Australia, which comes about through each State and Territory having its own laws for retirement villages and land lease communities.

In this environment, it is understandably difficult for the Australian Government - and the State and Territory governments which are meant to administer the grant - to come together to deliver the policy intent of the scheme to ensure the grant only goes to owner-occupiers and not tenants.

Potentially, the HomeBuilder shambles has illustrated the need for a national retirement living policy and legislative framework, to create a more coherent platform on which initiatives such as HomeBuilder can be built.

It has also illustrated the need for the industry to take a breath and clearly advocate that downsizing is in the national interest, and that a government strategy should be created to support the concept.

SEE ALSO: AUSTRALIA, WE HAVE AN EMPTY BEDROOM PROBLEM

SEE ALSO: THE CASE FOR CONTINUING THE LAST HOME BUYERS' GRANT