Moving into a smaller property is a step many people take later in life. Not only can it make day-to-day living more affordable, but it can also release any equity they've already built up in their home.
However, the Property Council of Australia has suggested that people need more help downsizing, which can be achieved through policy action and giving older Australians the encouragement they require.
Asset rich, income poor
Figures from the Australian Bureau of Statistics (ABS) show that many older people in this country have strong assets, but the same cannot be said for their retirement income.
Three-quarters of older people in low-income households owned their property outright, while a further 8 percent had decided not to buy a house and were renting.
Mary Wood, the Property Council's executive director of retirement, said a typical person over the age of 65 has around $600,000 in property assets. However, they will be living their daily life on a fixed income.
"It makes little sense, both from an economic and a health and wellbeing perspective, to trap older people in large and often unsuitable family homes, with little money available to spend," Ms. Wood commented.
Coming up with a solution
The Property Council is calling for changes to be made to the existing means-tested approach to equity release. It argues that some proceeds from selling the family home should be exempt from the full rate of tax, especially among people over the age of 75.
This would give older Australians an incentive to put their larger property up for sale, while encouraging them to go in search of a more appropriate real estate for their needs. Not only this, bigger homes will be made more readily available to families who would benefit from greater amounts of space.
If you or your elderly parents are looking for an agency to sell your home in the Glen Waverley, Mount Waverley, Wheelers Hill and nearby suburbs with hassle free experience, our team at First National Waverley City love to listen to your moving needs. You can call us on 9560 3988 or fill in below property appraisal form, one of our helpful agents will contact you shortly. WE PUT YOU FIRST!