Invest
Mum and dad property investors? Try nan and pop
Nearly a third of pre-retirees are property investors, a new report calling for changes to the pension assets test reveals.
Mum and dad property investors? Try nan and pop
Nearly a third of pre-retirees are property investors, a new report calling for changes to the pension assets test reveals.
The Australian Housing and Urban Research Institute’s (AHURI) latest report has found “incremental” reform to the age pension assets means test is needed to produce an equitable and sustainable tax system.
This recommendation comes with the finding that between 2002 and 2014, the proportion of people approaching retirement (between 55 and 64) who own an investment property grew from one-quarter to 30 per cent.
At the same time, the value and existence of owner-occupied homes in asset portfolios has grown. In 2002, the family home made up about one-third of pre-retirees net worth. That figure had grown to 40 per cent by 2010.
“[This] discussion has important implications for housing policy, given the role of housing as one of the pillars of the retirement income system and the recognition that changes to any one pillar will have ramifications for the remainder of the tax and transfer system,” said researchers Stephan Whelan, Kadir Atalay and Lachlan Dynan.
Emphasising that any reform needs to be long-term to allow Australians time to prepare, AHURI said there are “sound grounds” for significant changes to the tax treatment of housing in retirement.
Combined, investment properties and holiday homes make up the third-largest portion of pre-retirees’ wealth, after equity in the family home and superannuation.
However, by 2014 its prevalence had grown to make investment properties the third-largest component of wealth among this group.
“It is unlikely that widespread support exists for some of the fundamental changes that have been mooted – such as the removal of the exemption of housing from the assets means test,” the report acknowledged.
“Rather, reform will need to be incremental, recognising the relative value that home ownership confers and the relative light taxation of it over the life-cycle.
“Changes to the age pension assets test that address these issues in a fiscally sustainable manner are likely to offer opportunities to enhance both the efficiency and equity of the tax system over time.”
RELATED ARTICLES
Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more
Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more
Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more
Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more
Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more
Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more
Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more
Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more
Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
