One state has made a bold move on tax cuts for seniors

The national property body wants a tax break proposed by the West Australian government for seniors rolled out across the country.

Premier Colin Barnett’s government has promised that if re-elected, it’ll drop stamp duty for older residents who sell the family home to downsize.

Each state has different stamp duty charges. In WA, the proposal means that people who sold a property worth up to $440,000, there’d be no stamp duty – a saving of more than $15,000. For houses worth up to $750,000, the duty would be roughly halved – again, a saving of about $15,000.

The deal will be available for two years from the start of 2018 if Barnett’s Liberals win the state election on March 11.

Almost 70 percent of retirement villages in WA have waiting lists for prospective residents and 75 percent of the houses on the market have three or more bedrooms, leaving little downsizing options for seniors. But Barnett is encouraging community groups who’re on government land to submit proposals to develop any unused land into accommodation for the aged to meet demand.

The Property Council of Australia has backed the plan, which it has previously proposed to the New South Wales government.

Ben Myers, the council’s executive director for retirement living, says in-house research shows that downsizing can allow people to live independently for longer.

“Unfortunately, there are many barriers to downsizing that currently exist, including lack of available supply, the structure of Age Pension asset testing and the high cost of stamp duty,” Myers explains.

“This policy is a positive step forward and one we hope all state governments are considering, to ensure senior Australians have housing choice and can downsize at low cost.”

Downsizing has the added benefit of freeing up housing for first how buyers, Myers says.

The NSW Department of Planning and Environment released a study in October that shows Sydney alone has 1.8 million unused bedrooms every night, which is equivalent to 20 years’ worth of housing supply, or 600,000 houses.

“We need to find ways to make it easier for people who want to downsize to do so, state planning minister Rob Stokes said at the time. “There’s no suggestion anyone in a big home should be pressured to leave, absolutely not, but we need to look at how to ensure people have a choice.”

Would you consider downsizing if stamp duty, or another barrier such as lack of other housing choices or worries about means testing, were removed? Have you downsized successfully? What advice would you offer?