Housing shortages and taxes hinder seniors eager to downsize in Australia

Older Australians want smaller homes but face limited supply and stamp-duty costs, prompting calls for zoning reforms and tax changes.

A majority of Australians aged 55 and older are willing to downsize, but they encounter a shortage of appropriate homes and costly transaction taxes. The Productivity Commission’s interim report highlights planning restrictions—such as limits on building heights, lot sizes and mixed-use development—that curb the construction of townhouses and low-rise apartments favored by downsizers. Danielle Wood warned that these rules increase costs and reduce housing variety, while Matthew Bowes noted that many desirable suburbs with aging populations are especially affected.

Recent policy moves include South Australia’s stamp-duty exemption for buyers over 60 and the ACT’s plan to replace stamp duty with a land tax, though implementation challenges persist. Seniors like 78-year-old Eleanor Shearing in Seaford and 70-year-old Christine Toose in Queensland struggle to find affordable, single-level homes near their existing communities, underscoring the need for coordinated reform at state and local levels.