Most older people are open to downsizing. So what are the barriers?

Older people open to downsizing but undersupply and stamp duty among barriers Tue 4 Aug 2026 at 4:40am As 78-year-old Eleanor Shearing looks over the cluttered boxes around the place she's lived in for 50 years, a mix of nostalgia and anxiety set in. Seaford, a coastal suburb of Adelaide, is where she raised a family, formed a community and made a life. But her three-bedroom home is now getting harder for her to live in, and on a single income, it's also becoming harder to pay for. After four years of trying to downsize, Ms Shearing fears she might have to leave Seaford entirely. She is not alone in wanting to downsize. Research has shown more than half of people over the age of 55 are open to it. "This is home. It's very difficult when you're older to sort of start off anew,"she said. "I've thought about it, [but] you lose that connection with the community. "I've got a lovely bunch of friends and people that I've known down here for a long time. So I really don't want to move too far away." So what are the barriers? The Productivity Commission has identified several factors, including planning laws, that are restricting housing supply and choice. Those findings are laid out in its interim report into what governments can do to unlock more new homes. While the full report is expected in March 2027, the interim report identifies several ways these barriers could be removed, including: - Allow up to three-storey developments across most residential land - Allow mid-rise or high-rise apartments in high-demand areas - Allow residential development in commercial zones, unless there is a clear rationale for excluding it - Reduce or remove minimum lot size requirements - Relax or remove built-form controls that limit flexibility and choice for households Productivity Commission chair Danielle Wood said poorly designed regulations made projects slower, more expensive and reduced the range of housing types available. "The rules should allow us to build enough housing in the right places, while still protecting the things Australians value," she said. Grattan Institute housing expert Matthew Bowes said many of the most desirable places to live, which often had aging demographics, were subject to restrictive zoning rules. Those rules blocked housing supply by making it more difficult to build townhouses and low-rise apartments that might be most attractive to downsizers, he said. "So, those kinds of homes are undersupplied," he said. "Which makes it difficult for downsizers when they are trying to find a smaller home that still meet their needs in the community that they may have spent a lot of their lives in." Experts say most barriers for older people wanting to downsize sit at local and state government levels. One barrier that sits at the state level is stamp duty, according to Mr Bowes. In February, the South Australian government announced it would abolish stamp duty for people over the age of 60 who sell their homes to move into new builds. The Australian Capital Territory plans to phase out stamp duty completely in favour of a universal land tax. Mr Bowes said stamp duty was a tax on housing transactions that discouraged people from moving homes over time. "In the case of downsizers, they may stay in a home that is larger than they need for a long period of time because if they had to move, they would have to pay stamp duty. "So it acts as a disincentive on people choosing homes that best suit their needs at their stage in life." Australian Housing Urban Research Institute managing director Tom Alves said an ongoing universal land tax paid by all landowners was more stable, efficient and fairer. But there are challenges to implementing it, as two-thirds of properties are exempt from land taxes because they are the owners' main residence, he said. "Politically, the impacts of moving from a stamp duty regime to a universal land tax is possibly more problematic as this tax change will affect all landowners, and not just investors," Dr Alves said. "Reforms would need to be introduced incrementally." Most older people want to age in place Christine Toose is facing a range of these barriers in multiple states. The grandmother in her early 70s wants to sell her four-bedroom Queensland house and move home to Victoria, where she purchased her "forever home" off the plan in May this year. Ms Toose has grandchildren on the way in Melbourne, but the cost of stamp duty on her Queensland home has so far prevented her from putting it on the market. "If the governments are really serious about getting baby boomers out of their big houses, then they need to be offering some sort of incentives," Ms Toose told the ABC. "It's a big thing to move out of the place that you've been living in for some time. "Downsizing is just an enormous feat in itself." The changes to stamp duty in South Australia have helped make it easier for Ms Shearing to downsize. But she still is struggling to find a ground-floor two-bedroom home near her neighbourhood in Seaford. "I manage the stairs okay now, but there's probably going to come a time later on down the track that I won't be able to," she said. "If someone knocks down an old home in this area, they're going to put three and four townhouses on there. "I don't want a townhouse. I want to go into something that's on one level." She is among about two-thirds of older people who would like to age in place, which means to stay in your current home or neighbourhood as you age. She does not want to leave the place where she raised her children. But with tens of thousands of dollars left on her mortgage, the pensioner needs to find a solution soon. "I've been down here since 1971 … everything's familiar,"she said. "The bus runs past my door. I've got a park across the road. The doctors are just across the park. "As we age, you don't need as much either. But it's just knowing your community. "So to me, everything is very convenient and very handy. To move, I won't have all that." Loading...