Raine & Horne says the extension of the downsizer superannuation scheme will free up housing stock.
The Announcement:
Key points
- The downsizer superannuation scheme has been extended to those aged between 60-65
- Not only will this help boost retirement savings but will free stock turnover and potentially improve housing affordability.
Sydney, NSW (May 12, 2021:) Last night’s Federal Budget announcement to extend the downsizer superannuation scheme to those aged between 60-64 removes another excuse for more Baby Boomers to stay put in oversized family homes, said Angus Raine, Executive Chairman, Raine & Horne.
“Many empty-nesters are hindering the second home buyer markets in our major capital cities because there are no incentives for them to move,” said Mr Raine.
“This announcement tonight by the Treasurer means more Boomers can confidently take the plunge into downsizing in a tax-effective manner that will enhance their retirement savings.
“It will also increase the turnover of stock and help improve housing affordability for families and first-home buyers.”
The Raine & Horne Chairman has previously called on state governments to consider stamp duty tax breaks for empty nesters that will reduce the costs of a downsizing strategy and get stock turnover moving.
“If the state governments aren’t going to budge on stamp duty, I’m delighted the Federal Government is doing some heavy lifting by extending the downsizer super contribution.”
Following the Budget announcement, Australians aged 60-plus and who have lived in their current home for at least ten years can now sell up and scale down to a more manageable property and use some of the sale proceeds to make a downsizer super contribution. Previously this benefit was only available to those aged 65-plus.
The downsizer super contribution is limited to $300,000. But for couples who own a home together, each partner can make a $300,000 non-concessional (after-tax) contribution into superannuation.
“These contributions are not only a fantastic way to turbocharge retirement savings in a tax-effective way, but empty nesters will be able to make a community contribution by freeing up their larger family homes for the next generation of upgraders,” Mr Raine concluded.
Source: Raine & Horne
