Benefits go to the big cities
PENSIONERS are being encouraged to sell the family home, downsize and take advantage of the Federal Budget's investment incentive, but Landmark Harcourts real estate agent Yve Stocks said that may not be feasible for those on the Southern Downs.
From July 1 next year, pensioners who have owned their home for at least 25 years and decide to downsize will have the option to invest up to $200,000 in an account, to be invested for 10 years, without it being means-tested and in turn affecting their pension payments.
Ms Stocks said she saw the benefit in the incentive for those residing in the city, but Warwick was on a different playing field.
"I think it would only work for people in the city where homes are worth a lot more," she said.
"A $200,000 house in Warwick might be worth $500,000 in Brisbane because of the value of the land."
Ms Stocks made the point that the average selling price for a 25-year-old family home in Warwick was in the low $200,000s and downsizing to a small, older-style, one or two bedroom unit would set a pensioner back between $190,000-$230,000, leaving only a small portion of money, if any, to invest in an account.
"I doubt it would be any help here," Ms Stocks said.
Vice president of the Warwick Senior Citizens Association Mick McEniery said while he agreed there might not be much money left over to invest with the local market as it is now, the budget's incentive could encourage pensioners to downsize and decrease their workload around the house.
"I think it's a good idea for most to downsize because as a lot of people get older, their family has left home and they're left with the big family home that requires a fair bit of maintenance," Mr McEniery said.
"A lot of people I know are thinking about downsizing, but are unsure how to go about it so this would encourage them to do it."
He said those who chose to downsize and invest what was left over from their family home would be pleased to know it did not affect their pension.
"A lot of pensioners are reliant on their pension to survive and I think that would be a deterrent for many if they thought selling up would affect their pension because any reduction would affect them greatly," Mr McEniery said.