In a last-ditch effort to secure a few more votes before the federal election, Prime Minister Scott Morrison will unveil a mammoth empty-nest plan.
Empty nesters as young as 55 will be encouraged to downsize their homes and hide the money in their superannuation as part of the Prime Minister’s final policy speech to voters.
Scott Morrison will officially launch the Liberal Party campaign in Brisbane on Sunday and he plans to move on housing affordability.
Baby boomers, and for the first time Gen Xers, will be able to sell their homes and bank up to $300,000 in their super under the plan to be unveiled on Sunday.
The prime minister’s big idea is to encourage more people over the age of 55 to downsize without penalties, a move that will also free up more homes on the market for first-time home buyers.
Currently, you can sell your home and rack up $300,000 in super if you’re over 65, but with the changes, you’ll be able to do so when you’re just 55.
According to the Morrison government, up to 1.3 million empty nesters and retirees will be eligible for incentives to downsize their homes.
Retirees who downsize their homes will also benefit from greater flexibility by exempting proceeds from the sale of the property from the asset test for longer.
This means retirees will now have up to two years to structure their wealth after selling their home – with no impact on their pension.
“We are now giving Australians more choice in deciding how they want to live the next stage of their lives by removing financial barriers for people wanting to downsize their homes,” Mr Morrison said.
“By removing barriers for Australians who want to move into residences that better suit their needs and lifestyle, we are helping to free up bigger homes for young families.”
“Buying your first home is never easy and that’s why we’ve worked to help over 300,000 people achieve the great Australian dream of owning a home.”
“I want to help more and more young families across Australia move into their own homes and support their aspirations.”
If re-elected, changes allowing Australians over 55 to sell and downsize their homes and contribute $300,000 to their pension fund will begin July 1, 2022.
The Prime Minister stepped up attacks on Labor leader Anthony Albanese this week as a ‘loose unit’ on the economy.
He attacked the ALP’s plan to allow low-income families to buy a house with a smaller mortgage and the government owning up to 40% of the property.
Housing Minister Michael Sukkar said the policy they are announcing will give older Australians greater flexibility in choosing to downsize their homes and increase the housing stock for young families at the time. looking for bigger houses.
“These changes will directly help unlock the supply of larger homes for young families hoping to expand, and at the same time encourage older Australians to downsize by putting more into their super. By releasing more supply of larger homes, we are giving families more choices,” Sukkar said.
A re-elected Morrison government will also double the time pensioners have to structure their wealth following the sale of their family home, with no impact on their pension, from January 1, 2023.
WHAT CHANGES WITHIN THE POLICY
– Currently, only people 65 and older can put up to $300,000, per person, into their super suite upon sale of the family home.
– Under a plan by the re-elected Morrison government, this will move to people aged 55 and over on July 1, 2022.
– Under this election plan, up to 1.3 million additional people will now become eligible for this scheme.
– This will increase the time retirees have to structure their wealth following the sale of the family home – from one to two years – without impacting their pension.
– This policy will be introduced from January 1, 2023.
– There are approximately 1.9 million older retirees who are also homeowners and this policy is demand-driven.
– It is estimated to be $62 million more than the forward estimates.
– Under this undertaking, proceeds from the sale of the main house will be deemed at the lower deemed rate for the period during which the proceeds are exempt from the asset test. That is, the deemed rate used to determine income from sale proceeds that are placed in the bank or other financial investments will be 0.25%.