FEDERAL Member for Lyne Dr David Gillespie has spoken in support of legislation supporting pensioners who downsize their home.

The policy was announced by the Coalition in the lead up to the election and has been supported by both the Government and opposition with the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022 now before Parliament.

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“When people sell their primary residence, their own home, to downsize to a smaller unit or a smaller house, they have two years of exemption before they purchase their next primary residence, as opposed to the current situation where they will only get that leave pass for one year,” Dr Gillespie told Parliament.

“Those existing arrangements mean that, in the current housing market, you really have to be very efficient and know what house you are going to buy pretty much before you sell your own home.

“With the housing shortages and the rampant, runaway market over the last two to three years, that has proved problematic.

“With a 24-month window, there will be many more people that will take up the idea of downsizing.

“That means that bigger houses and bigger apartments that are available for young people will come on the market as a result, with potentially even more coming on the long-term rental market if investors buy properties to let them out – rental properties.”

Dr Gillespie said the new legislation also applies only the lower below-threshold deeming rate to the asset-test-exempt principal home sale proceeds when calculating deemed income.

“At the moment, with deeming-rate limits $56,500 for singles and $93,600 for couples combined, it will be a significant change.

“The 24 months mean that, while they are trying to find a house, they will get some reasonable income assistance – because they will have to rent somewhere in the meantime, with rents ridiculously expensive.”