It looks as though the Federal Government may offer exemptions from new superannuation limits to retirees who downsize their home.
The exemptions may or may not extend to quarantining sale proceeds from the age pension assets test.
The exemption looks set to be part of the upcoming federal budget, and will waive the $1.6 million cap on super retirement funds and the non-concessional amount contributed annually if it comes from the sale of a large family home.
The idea is to help housing affordability by freeing up large homes that aren’t being fully utilised for large families.
The policy targets self-funded retirees who don’t receive a pension, encouraging them to sell their home to boost retirement income.
According to the Australian Financial Review it’s understood the exemptions to both the $1.6 million cap and the $100,000 non-concessional contributions cap are being considered in the event of lump sum contributions from the proceeds of downsizing.
Shadow treasurer Chris Bowen said Labor would consider anything the Government put on the table.
“Labor has supported measures to make it easier for seniors to downsize their housing without penalising them,” he told AFR.
The Property Council of Australia supports exempting downsizers but only those aged over 75.
“We have to reduce transaction costs which lock people into homes that don’t suit them and are a big drag on the economy,” council chief executive Ken Morrison told AFR.