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Financial barriers prevent seniors from downsizing

on the Thursday, June 26, 2014

A significant proportion of older Australians are choosing to remain in the family home for financial reasons, a recent report shows.

The research was conducted independently by The National Seniors Australia Productive Ageing Centre to investigate the motivating and discouraging factors of downsizing for senior Australians.

Stamp duty, lack of affordable housing and the recent inclusion of the proceeds of the sale of the house in the Age Pension assets test were the most significant financial disincentives.

National Seniors Australia chief executive Michael O’Neill said there needs to be policy change at a federal government level to remove these financial barriers, including a friendlier stamp duty arrangement.

“They need to make some actual policy changes if they’re fair dinkum about painting downsizing as an attractive option for seniors,” Mr O’Neill said.

Mr O’Neill said it was disappointing that the proposed Housing Help for Seniors pilot scheme was dumped in the Federal Budget before there was an opportunity to learn from it.

“I don’t think it was perfect, but I’d be encouraging the government to pilot in this space so we can learn some lessons on appropriate housing for seniors.”

The report showed the factor that discouraged most seniors from downsizing was that it would take too much effort.

Mr O’Neill said there are a number of reasons why moving can become too hard later in life, so we should plan for our needs at an earlier age.

“If they want to downsize eventually, people in the 65-75 year age cohort should be planning for that now, before they reach 75 and it becomes too hard,” he said.

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