The Property Council has welcomed new measures by the Federal Government to incentivise seniors to “right-size” their homes.

The Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022, put before Parliament last week, will add 12 months to the asset test exemption for pensioners selling their homes, as well as slashing the deeming rate on principal home sale proceeds for purchasing a new home from 2.25% per annum to 0.25% per annum.

According to Minister for Social Services Amanda Rishworth (above), the bill is aimed at encouraging pensioners to downsize.

“We don’t want people putting off downsizing to a more suitable home because they are concerned about the impact it could have on their payment rate and overall income.

“These changes will give pensioners more flexibility to find a suitable new home and it will hopefully free up larger housing stock for younger families who need it,” she said.

Ben Myers (pictured), Executive Director of Retirement Living at the Property Council of Australia, has applauded the legislation, saying that most older Australians’ wealth is locked up in the family home and encouraging them to make use of that equity will “help them help themselves”.

“Incentivising older Australians to unlock their home equity and right-size into more suitable housing options, especially purpose-built age-friendly communities, is a wise move by government.

“Encouraging older Australians to right-size not only contributes to healthier ageing, it’s also one of the smartest and fastest ways a government can boost much needed housing supply for families,” he said.

More than 8,000 pensioners downsized their homes last year.