The Federal Government will introduce new incentives within weeks to help older Australians downsize to smaller homes, potentially freeing up over 50,000 properties each year for young families, according to The Australian.
The measures would include relaxing the rules for the Age Pension asset test and caps on superannuation to ensure retirees who sell the family home are not ‘penalised’ financially – they are talking of a one-off windfall up to $200,000.
Historically, many of us have been reluctant to sell our homes when we retire as any proceeds from a sale are considered an asset by the Government – which can see your pension take a nosedive.
In contrast, the family home is exempt from the assets test.
Why would we want to sell?
Home sweet home
But under the options being considered by the Government, retirees would also be able to put some sale proceeds into their super for a period of time.
Currently non-concessional contributions are being capped at $100,000 from July 1 this year, while super balances are capped at $1.6 million.
The package would also include incentives to boost housing supply for the over-55’s – such as retirement villages and Land Lease Communities (LLC’s) – so people can downsize within their own communities.
Larger homes will be freed up for younger families who are struggling to find affordable housing.
It’s now expected the measures will be announced in the May budget – it can’t come soon enough.
