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Investors planning for their retirement could potentially "shun convention" by upsizing to a more expensive home to improve their access to the aged pension.
Middletons Securities adviser David Middleton said a potential by-product of access to the aged pension being tightened and the taper rate increasing could be that savvy investors try to reduce the level of their assessable assets by moving capital to places where it is not assessed.
“An obvious choice will be to ‘hide’ the money in the value of their residence because the value of their residence isn’t counted,” he said.
“Because the family home is not counted as an asset it means that this can essentially become a bricks-and- mortar bank account to be drawn against as needed.
“This might just ring the death bell on the days when an empty-nester couple chooses to downsize from the family home to something more manageable – and instead we may see them look to buy something that is actually more expensive.
“We can expect to see more and more cashed-up older buyers using their superannuation investments to out-price younger families for the conventional family home, and the other factor to consider is that a change in seller behaviour may very well stall this segment of the housing market, as older people choose to sit on the family home rather than sell.”
[Related: How SMSFs are influencing property investment]
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