Call to unlock $1 trillion in housing wealth – making more larger homes available for young families.
Helping our retired population downsize could assist in making more larger homes available for young families. One of the blogs further down this page was highlighting the fact that a recent survey shows Australians aged over 65 suffer the second highest relative income poverty rate of the wealthy countries in the Organisation for Economic Co-Operation and Development with only Korean retirees worse off than Australians.
Catherine Nance of PWC has written that many baby boomers could boost their standard of living if penalties that apply to selling the family home were removed.
Her report Unlocking Housing Wealth – options to meet retirement needs proposes a range of policy changes including:
- Targeted stamp duty relief for older Australians downsizing to smaller homes, similar to stamp duty relief for first home buyers.
- Partial relief from the age pension means test for people who take out reverse mortgages or downsize their homes.
- Greater assistance for seniors who rent their homes, who are at a relative disadvantage to homeowners.
- Some tightening of the age pension asset test for very wealthy retirees, possibly through a cap on the exempt value of the family home.
I’m sure these measures would assist our many asset rich but cash poor retiring Australians. The other question to be answered would be if these measures would assist in freeing up family homes in Sydney and family homes in Melbourne, in particular, for young families who require larger homes closer to our major city centres?
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