Giving home owners over the age of 70 a concession on stamp duty could help boost the second-home buyers market and provide a solution for those wishing to downsize, according to a leading real estate player.
Angus Raine, executive chairman of real estate agency Raine & Horne is urging state governments to reconsider stamp duty tax breaks for home owners over the age of 70 that would like to downsize.
According to the real estate mogul, the tax concession could help retirees with limited funds to move out of their “large family homes” once their children have left home. He argued that this would be particularly desirable in Sydney and Melbourne, where there are “affordability stresses”.
Indeed, recent research from the Housing Industry Association (HIA) has found that stamp duty is “setting ordinary home buyers back by an average of $19,975”, while CoreLogic has found that median stamp duty in Melbourne and Sydney is now over $30,000.
Mr Raine said: “The national housing debate focuses mostly on first home buyers, and with good reason given climbing real estate values combined with an ongoing shortage of new homes.
“The trouble is that upgrading to a bigger home is not a simple or straightforward transaction, especially with more empty-nesters in Sydney and Melbourne sitting tight on large family homes.”
He continued: “Empty-nesters are hindering the second home buyer markets in our major capital cities because the stamp duty costs for them to buy a smaller property or a different location are too prohibitive.
“Stamp duty eats into the retirement nest-eggs of many older Australians, especially those who have very little in the way of superannuation savings, because the majority of their working careers were completed prior to the introduction of compulsory superannuation in the early 1990s.
“Stamp duty-free real estate transactions for older Australians will help address some of the current supply constraints that are cramping the real estate plans of many upgraders,” he concluded.
The tax placed on legal documents for the sale of property has become of increasing concern recently, with many arguing that rising property prices in attractive property markets such as Sydney and Melbourne are locking out first home buyers, as well as second home buyers too.