RLC Executive Director Daniel Gannon said the realestate.com.au / GemLife Downsizing Australia Report shows the nation's "retirement system is stuck in the past leaving older Australians to pay the price".
"You work your whole life, then get penalised for making a smart move that frees up homes for younger families? That's punishing, painfully short-sighted, and profoundly self-defeating policy," he said.
"Right now, if an older homeowner sells the family home to move into a retirement village, they can be financially penalised. The rules are so outdated they block access to vital payments through the Age Pension and Commonwealth Rent Assistance (CRA), which then locks tens of thousands of older people in homes that aren't suitable for ageing."
Mr Gannon said "simple reforms" could save almost 100,000 retirees from being penalised and unlock almost 60,000 homes for younger buyers. Earlier this year, the RLC called for:
- Changes to the Age Pension assets test to allow single homeowners who 'rightsize' to own assets of up to $550,000 before their pension income is impacted, with an equivalent increase to the threshold for couples. The current threshold is $314,000 for singles.
- The removal of the incoming purchase price threshold for Age Pensioners who 'rightsize' into retirement villages to allow access to CRA payments, consistent with eligibility applicable to residents in other seniors' communities (land lease and manufactured home estates). Currently, the threshold is $252,000.
These changes could lead to significant outcomes across the country:
- Release 59,576 homes back into the Australian housing market.
- Encourage an additional 94,000 seniors to access retirement village housing options.
- Generate $2.95 billion in stamp duty revenue for state governments.
- Reduce costs and demand on public housing, hospital and aged care systems.
- Improve quality of life for older Australians who move into age-friendly retirement villages.
"The Commonwealth must fix the Age Pension assets test and bring CRA eligibility into the modern era, especially for retirement village residents. That one-two punch would give older Australians more housing choice and return tens of thousands of family homes to the market," Mr Gannon said.
"These changes aren't just about fairness - they would free up tens of thousands of family homes into the wider housing market, while also looking after retirees.
"This latest report reminds us of the 'silver tsunami' that is already impacting communities, housing markets, healthcare systems and economies across Australia. When populations change, policy frameworks must adapt - it's non-negotiable.
"Older Australians aren't asking for handouts - they're demanding modern policy settings that don't work against them. This latest report is a huge wake-up call."
