Downsizers Feel Stamp Duty Pain
While first home buyers in numerous states have been given stamp duty concessions from their perspective governments, recent research shows the tax is a challenge for older purchasers, as well.
Research between LJ Hooker and Downsizing.com.au, found stamp duty was the biggest obstacle for older Australians downsizing from the family home. In turn, stamp duty is preventing family houses – and many unused bedrooms – from being freed up and purchased by first, second and third home buyers, which would improve affordability across the wider marketplace.
The research, which is based on a survey of 800 seniors prior to the Federal Budget, found that:
- 70% of respondents are looking to downsize from the existing family home, either now or in the future;
- 89% of respondents had spare bedrooms in their family homes, which were more likely to be occupied if the property was sold. Indeed, 64% had two or more spare bedrooms and 23% said they had three or more spare bedrooms;
- 25% of respondents however said the cost of moving – including stamp duty on their next purchase – made selling impractical.
LJ Hooker Head of Research Mathew Tiller said: “About two thirds of survey respondents had two or more spare bedrooms in their houses. If state governments lessened the stamp duty required to downsize, they would be filling in a piece of the affordability puzzle, and follow on from the Federal Government’s scheme to make downsizing easier.”
Under the Federal scheme, seniors aged 65 and over who have lived in the family home for more than 10 years will be able to make a $300,000 non- concessional contribution from the sale of their home to their superannuation. If a couple, both individuals can claim the incentive.
Mr Tiller also pointed out that the reluctance of seniors to sell the family home influenced an 8.9% decline in listings over 2016 and 9.2% fewer sales.*
*CoreLogic RP Data.