Financial Disincentives and Lack of Appropriate Housing Thwarting Senior Downsizing

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Seniors wanting to downsize their homes are being stopped by financial disincentives and a lack of age-appropriate housing, research from the national seniors productive ageing centre has found.

Around 30 per cent of seniors surveyed were considering downsizing, which, on a national scale, equated to one million people, according to Mary Wood, executive director of the Retirement Living Council, “but many are unable to due to barriers put in place by governments”.

While the major barrier to moving cited in the survey was the effort involved, next on the list were stamp duty, then inclusions of the proceeds from the sale of seniors’ homes in the Age Pension Assets Test, as well as a lack of available age appropriate housing.

Downsizing has the benefits of reduced energy consumption, lower maintenance, more equity for health costs and a more efficient use of housing stock.

Of people considering moving to a smaller residence, the most common reasons reported in the survey were not being physically able to maintain the home and the cost of maintaining the home or yard.

“we encourage the federal government to remove penalties on age pensioners who wish to downsize and support the desire of many seniors to live independently in smaller home built for their needs. The grab-rails on wall and other mobility-enhancing features” Ms Wood said.

“Removing disincentives would reduce the number of senior Australians who feel “trapped” in an unsuitable home which reduces their quality of life”

A recent Productivity Commission report on preparing for an ageing Australia agreed that stamp duty was a major disincentive for downsizing housing.

“The Henry Tax review found stamp duties were [particularly inefficient taxes and should be replaced by other taxation measures. Doing so would lessen disincentives for people to downsize their housing as they are”, the report stated

Ageing population intensifying the issue
The results from the survey are worrying, as Australia is dealing with an ageing population. The number of people aged 75 or more years is expected to rise by four million between 2012 to 2060, increasing from about 6.4 to 14.4 per cent of the population. Currently 27 per cent of people aged 70 years and over live alone.

“Policy interventions to reduce financial barriers, such as the pensioner Duty Concession Scheme in the Australian Capital Territory and the pilot scheme proposed by the Labor Government in 2013, may help encourage downsizing but, given the range of factors that influence people to downsize, these would be most effective if coordinated with other incentives such as housing that is suitable in terms of accessibility, size, affordability and location and incentives to promote independent living “the survey report stated”.

Strong preference to stay in big homes
National Seniors chief executive Michael O’Neill said while there were barriers to downsizing, the results showed most seniors had a strong preference to rain in larger homes.

“policymakers talk of seniors downsizing and freeing up family-sized home but it seems older Australians aren’t so keen to do so” Mr O’Neill Said

“considering the lack of policy incentives to downsize and the strong emotional attachment all Australians have to their family home, these finding are hardly surprising.”

He said policy interventions to reduce financial barriers and a commitment to address the lack of age-appropriate housing in Australia could increase the incentive to downsize, however.

 

Source:

Cameron Jewell
https://www.thefifthestate.com.au/business/government/financial-disincentives-and-lack-of-appropriate-housing-thwarting-senior-downsizing

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