An Australian real estate identity is urging the Victorian government to introduce stamp duty tax breaks for home owners aged over 70 due to the problems stamp duty creates for those wishing to purchase their second home.
Raine and Horne executive chairman Angus Raine said 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.
Mr Raine said people are unable to upgrade to a second home due to empty nesters, particularly in Sydney’s northern and eastern suburbs, who are holding onto their properties as a result of the transaction costs involved, which is creating supply issues in the capital cities.
“Upgrading to a bigger home is not a simple or straightforward transaction either, especially with more empty nesters in Sydney’s northern and eastern suburbs and Melbourne’s southern and eastern suburbs sitting on larger family homes,” he said.
The median price of a four-bedroom house in Melbourne’s inner-city suburb of Toorak is $3.88 million which would see the buyer paying $213,000 in stamp duty according to the Victorian Government’s State Revenue Office website calculator.
“Empty nesters are hindering the second-home buyer markets in our major capital cities because the cost for them to downsize either to a smaller property or a different location are too prohibitive thanks to excessive stamp duty charges imposed by state governments,” Mr Raine said.
The real estate boss would like stamp duty tax breaks to apply to those over 70 who are selling their main family home saying that many older Australians don’t get the benefits of uncapped, tax-free superannuation payments, which the younger baby boomers can enjoy as they prepare for retirement.
“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 second-time property buyers in our capital cities,” he said.