Good Life feature: seniors downsizing.
Australia’s pre-eminent homebuyers association has made a bold call to give Baby Boomers buying to downsize a stamp duty cut for homes worth up to $1m.
And they believe one more win for the nation’s most successful housing generation could be part of the solution to getting more younger first-home buyers into the market.
The Real Estate Buyers Agents Association of Australia have called for Aussie homeowners aged 60-plus to be given a stamp duty concession for purchases worth up to $1m, to encourage them to downsize from larger homes.
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It would effectively assist Baby Boomers initially, with the generation now aged from 61-79 years old.
Acting REBAA president Zoran Solano said stamp duty was a key barrier that was stalling many of those who were considering such a move.
“While some states offer concessions for pensioners, the thresholds are outdated and don’t reflect current market price points,” Mr Solano said.
“It’s unfair that someone in their 70s pays the same transfer duty as a 30-year-old.
“And for a lot of them it would remove another hurdle and make the overall process smoother.”
Hot Property Buyers Agency managing director and REBAA president Zoran Solano has called for a stamp duty discount for downsizers.
Acknowledging that Baby Boomers had already had a good run from the housing market, with Finder stats showing that in 1984 it cost 3.3 times the average Aussie wage to buy a home — compared with 10 times the typical income by 2023.
They’ve also enjoyed significant growth in the value of those homes as interest rates have trended downwards, allowing prices to push up more rapidly than many past eras.
“So, yes, they have been fortunate in the growth that they have experienced, but nothing is stopping the next generations from saving hard, working hard and doing the same thing over their lifetime,” Mr Solano said.
And, giving Boomers a discount on their stamp duty to downsize, would potentially help younger buyers to make a move.
Younger homebuyers benefit from downsizing as more large homes are freed up for their use — or are developed into additional smaller housing.
The buyer’s agent said anywhere from 25-30 per cent of his clients were downsizers, and many needed to achieve specific outcomes from the sale of their home to ensure they were set up to avoid relying on public healthcare systems as much as possible as they aged.
As a result, he estimated there would be tens of thousands, if not hundreds of thousands of people aged 60 plus who might well consider a downsize if the tax burden was reduced for their next home — which would free up more family-sized homes in desirable suburbs for sale, or development into more affordable home options.
Mr Solano noted that in one instance recently he’d helped a NSW-based downsizer to purchase a home with a plan to downsize — but when they couldn’t sell their existing home for quite enough money, they had walked away from the plan and still resided in their old residence.
Happy senior couple get keys to own home from realtor, excited older customers buying real estate property at meeting with agent concept, smiling aged family buyers happy to become new house owners
“And with a stamp duty discount, she probably would have gone ahead,” he said.
Another downsizer he had worked with recently sold the 1200sq m block they had been living on since the 1990s to fund their purchase of a three-bedroom unit, and to top up their super.
That had made the home available to a family that would make wider use of the home, or potentially could have led to a developer purchasing it and turning it into multiple more affordable homes.
Mr Solano said the latter outcome was the most advantageous, as many downsizers were competing with first-home buyers for more affordable townhouses and units — so increasing the volume of them available would help reduce that competition and price growth.
The national property buyers advocacy group is not the only one to make the big call.
Real Estate Institute of Australia president Leanne Pilkington said her lobby group had made similar calls for downsizer reductions in the past as a way to boost housing supply.
The Real Estate Institute of Australia also called for a last-home buyer scheme including stamp duty reductions to incentivise older homeowners into freeing up homes for sale and development.
President Leanne Pilkington said the proposal had merit given stamp duty could be north of $100,000 for some downsizers, and that it could have a significant impact on the housing market and overall affordability.
For those concerned about futher benefits to a generation that had already had a lucky run on the property market, Ms Pilkington said after having done nothing for a lengthy period the time to try something different was upon us.
“This is potentially an exceptional strategy for freeing up property in the middle rings,” she said.
“So it’s what do you prefer? Things to just stay the way they are, or would you prefer governments explore what might be possible with regards to the housing crisis?”
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