Government’s downsizing tweaks fail to impress

The Coalition has announced changes to the strategy to encourage retirees to move into smaller homes ­ if it wins the election. But what do older Australians think of the plan?

Currently, individuals aged 65-plus can contribute up to $300,000 to their super when downsizing. It’s regarded as a non-concessional contribution. From 1 July, the age limit drops to 60, but the Coalition has promised to lower the eligibility age to 55 from 1 July 2023 if it is re-elected. Labor says it supports the change.

The Coalition also pledged to double the amount of time older Australians have to structure their assets after the sale of their home from one year to two.

National Seniors Australia (NSA) welcomes the announcement, but says the policy needs work and represents a missed opportunity.

Chief executive Ian Henschke says NSA submitted a policy to government to “allow recipients of home care packages the option of downsizing to a smaller, age-friendly home by exempting excess sale proceeds from the pension assets test indefinitely, not just for a few years”.

“We suggested restricting eligibility to people who were aged 80 and over, were eligible for a Home Care Package and had owned their home for more than 10 years, ” he said.

Read: How does the ATO define ‘downsizing’?

We asked YourLifeChoices readers what they thought of the government’s policy and what it would take for them to consider downsizing.

It’s safe to say the policy is not too popular, at least in its current form.

Many readers say the policy is irrelevant, as they could never be convinced to downsize.

“Nothing would encourage me to downsize,” says member Susan Sedivy.

“My husband is 77, I’m 70. We love where we live. It is close to shopping centres, healthcare, parks and other important amenities. Buying a smaller home would not be cheaper for us in the long run because we want to remain living near friends and family.

“We took a straw poll at the gym this morning and all those in our age group shared our views.

“This is not a policy worth considering by us or by our friends.”

Read: How selling and downsizing affect your Age Pension

David Chapman says the policy is nothing more than a transparent attempt to woo older voters.

“Our illustrious governments, regardless of their party, need to offer something really substantial to entice us pensioners to vote for them, instead of fooling around with meaningless drivel on how this or that will benefit a few here and there but leave the rest with nothing,” he says.

“Yeah, I know they all think we’re stupid and incompetent, but they’re wrong in that.

“Give us a real incentive that will benefit all pensioners, like a dramatic increase in the pension payment rates.”

Read: The who, what, where, how and why of downsizing

Others could see the benefit in the policy, but not so much for themselves.

“As my home is modest,” says reader Jaye Johnson, “to downsize would not leave me hundreds of thousands, so to waive all fees would be an encouragement.

“Little benefit otherwise to me as the cost outweighs my benefit if I get under $100,000 in hand.”

Some members thought the policy had legs, but that serious tweaks needed to be made before it became truly appealing, especially when it comes to stamp duty on new homes.

“We are thinking of downsizing in around four years but what puts us off is the stamp duty,” says Elizabeth Wisgard.

“So, if stamp duty and transfer fees were dropped or greatly reduced, this would be much more of an incentive.”

Warwick Bentley echoed those thoughts on stamp duty.

“The biggest ‘other’ cost in home purchases is this rip-off stamp duty TAX,” he says.

“How about moving on with this house availability issue by say letting the retired over-65s purchase their smaller home with no stamp duty or at least less of it.

“After all, these are people who have already paid their taxes for more than 45 years.

“Let’s move on with this tax update and then also have the benefit of more older houses available in closer in suburbs for the young families that don’t want to be stuck out in the distant areas with little or no facilities.”

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

Brad Lockyer
Brad Lockyer
Brad has deep knowledge of retirement income, including Age Pension and other government entitlements, as well as health, money and lifestyle issues facing older Australians. Keen interests in current affairs, politics, sport and entertainment. Digital media professional with more than 10 years experience in the industry.


  1. Just out of curiosity what housing options are available for senior pensioners that don’t own their own home?

    I’m sure I cannot be the only senior who rents and does not really want to end up in a bedsit…

    The only rentals I have found are the bedsitters which are inappropriate for anyone who is still actively involved in crafts or other activities in their home and would like to have a little space inside to enable them the option of having somewhere to put a sewing machine or keep their goodies, crafts or tools or whatever it is they like to do and of course perhaps room for the grandkids to visit?

    I would personally love to live in a retirement village with other like-minded and aged people however to date have not been able to find anything suitable and am getting worried as my housing rental will go up to a higher rate than I cannot afford soon – so if anyone has any info on rental villages with at least 2-bedroom rentals I would love to know about them???

- Our Partners -


- Advertisment -
- Advertisment -