Rumoured LNP changes - to encourage dwelling downsizing. The effects?

I've read of strategy that is being strongly pondered by Scott Morrison to reduce the currently massive disincentive for retirees to downsize their family homes.

The plan is to reward those who downsize their home by allowing them to buy a lifetime annuity with the cash proceeds freed up, and for that annuity to be exempt from the Aged Pension Assets/Income test assessments. There is no net tax change for the government here due to CGT free status of famiy home anyway. There is hundreds of billions of equity to be unlocked here.

The only cloud, and perhaps just as big of a roadblock, is the stamp duty issue, that the states will need to think of a plan (such as capping SD, or applying a SD tax free threshold for these pensioners.

Benefits
*Frees up land rich, underutilised homes.
*Frees up large home for a family with kids, or site redevelopment into a higher level of density.
*The annuity income stream, and newly found spending power of this pensioner class will boost economic activity throughout the country (Really great for the rural areas)

This would be a great first step, Mr Morrison.

 

Don't take this the wrong way but are you some kind of political party mole using us as a sounding board? Just your name and the other thread you started has me suspicious.

 

Registered 17th January with a total 5 posts. 4 on LNG

Could be right @Biz

 

Fully agree with your view.

I felt same doubt when i read first post about changes in negative gearing but this post has confirmed it.

 

Maybe its Scott Morisson?

 

I confirm no affiliation with any political party, just trying to get some good property market game changer conversation started, where it has not been discussed before (here) Read my 5+ year tweet history if you have any doubts.

 

With that plan, the real estate agents and financial planners will be licking their lips.

 

Annuity - who's offering it, backing it, risk level, rate of return, what's it invested in (CMBS or some 5th tier lender on dodgy residential loans wrapped up to smell a bit less)?

 

Why should it be exempt from an asset/income assessment for the pension? Like a PPOR I think it should be included or otherwise any pension paid clawed back from the estate...

 

...and for those with no estate?

 

The pension should be a safety net only for those who need it, if they have no estate then presumably the pension was needed.

 

I believe they have been posting all over the web for years taking an anti-investor stance, belief in a property bubble, supports a land tax, supports abolition of NG and that investors cause inequality, is part of or supports the group at Prosper Australia - Access → Opportunity → Prosperity.

Probably gen y.

 

Completely agree with you. The main issue here is that the dumb voting public wouldn't swallow the ppor being included in the assets test.

Downsizing is the obvious choice. Unfortunately need some incentive or penalty to steer people in that direction.

 

The question is would you TRUST Scott Morrison....that is the real question??

Great idea would support it...but if this was implemented...he would want to claw back some of the money to fill the budget hole.

The real issue is the credibility of uncle Scott....if I shook his hands..I would be counting the number of digits on my hand....

 

Prefer if they got rid of the Federal senate and all the costs associated with it running. Should save some $$$.

Take this further, cut the number of MPs down and a few extra $$$ saved.

 

Think of all those redundancy payments.

 

The senate's important in 'keeping the *******s honest' and in the scheme of things wouldn't save much at all.

 

Not worked to day very well.

76 senators at $200,000 pa plus superannuation's and benefits and the extra $$ for senate hearings is a great start.

The average senator employs 5-6 staff members and need expenses covered such as rental for an office, accommodation, travel etc.

 

Now days it's seems like role reversal and it's

" Keep the *******s in the Senate Honest ".....

Cliff