Federal Election 2022: Prime Minister Scott Morrison’s $300k ‘baby boomer’ downsize plan
In a last-ditch effort to snag a few more votes ahead of the Federal Election, Prime Minister Scott Morrison will unveil a mammoth plan for empty nesters.
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Empty nesters as young as 55 will be encouraged to downsize their homes and stash the cash in their superannuation under the Prime Minister’s final policy pitch to voters.
Scott Morrison will officially launch the Liberal Party’s campaign in Brisbane on Sunday and he’s planning to flick the switch to housing affordability.
Baby Boomers, and for the first time older Generation X-ers, will be able to sell their homes and stash up to $300,000 in their super under the plan to be unveiled on Sunday.
The PM’s big idea is all about encouraging more people aged over 55 to downsize without penalties, a move that will also release more housing stock into the market for first home buyers.
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Currently you can sell your house and stash up to $300,000 in super if you’re over 65 but under the changes you will be able to do it when you’re only 55.
Up to 1.3 million empty nesters and pensioners will be able to access incentives to downsize their house, according to the Morrison Government.
Pensioners who downsize their home will also be given greater flexibility by exempting the proceeds of the sale of the property from the assets test for longer.
It means pensioners will now have up to two years to structure their assets following the sale of their home – without impacting their pension.
“We are now giving Australians more choice to decide how they want to live the next stage of their life by removing financial barriers for people wanting to downsize their home,’’ Mr Morrison said.
“By removing barriers for Australians downsizing to residences that better suit their needs and lifestyle, we are helping to free up larger homes for younger families”.
“Buying your first home is never easy and that’s why we have been focused on helping more than 300,000 people realise the great Australian dream of owning a home.”
“I want to help more and more young families right across Australia to move into their own home and support their aspiration.”
If re-elected the changes to allow Australians over the age of 55 to sell and downsize their home and contribute $300,000 into their superannuation fund will begin on 1 July 2022.
The Prime Minister has been ramping up the 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 per cent of the property.
Housing Minister Michael Sukkar said the policy they are announcing will give older Australians greater flexibility in choosing to downsize their home and increase housing stock for younger families looking for larger homes.
“These changes will directly help in unlocking the supply of larger homes for those younger families who are hoping to expand, and at the same time incentivise older Australians to downsize by putting more into their super. By releasing more supply of larger houses, we are providing more choice for families,’’ Mr Sukkar said.
A re-elected Morrison Government’s will also double the time pensioners have to structure their assets following a sale of their family home, without impacting their pension, will begin on 1 January 2023.
WHAT’S CHANGING UNDER THE POLICY
Super policy
– Currently only people 65 and over can put up to $300,000, per person, into their super following the sale of the family home.
– Under a re-elected Morrison Government plan this will drop to people aged 55 and over on 1 July 2022.
– Under this election plan, up to 1.3 million additional people will now become eligible for this scheme.
Pension policy
– This will increase the amount of time that pensioners have to structure their assets 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 around 1.9 million Age Pensioners who are also homeowners and this policy is demand driven.
– It is estimated to cost $62 million over the forward estimates.
– Under this commitment principal home sale proceeds will be deemed at the lower deeming rate for the period the proceeds are exempt from the assets test. That is the deeming rate used to determine the income earned from the proceeds of the sale that is put into the bank or other financial investments will be 0.25 per cent.
Originally published as Federal Election 2022: Prime Minister Scott Morrison’s $300k ‘baby boomer’ downsize plan
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