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Buy your own home or risk living an impoverished old age; Benefits of home ownership
Topic Started: 18 May 2012, 08:49 AM (2,729 Views)
NotFooled
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The Bear Whisperer

Extract from an article in the rent vs buy thread:
Quote:
 
There are numerous tax breaks and exemptions on the family home that make home ownership a financial necessity if you want to enjoy – rather than endure – your older age.

Everything from childcare rebates, age pensions and capital gains tax excludes the political sacred cow of the family home.

If you get a pension and own your home, you are obviously better off than someone who has to pay rent as well as living costs out of a meagre $35 a day.

In fact among older people who don’t own their homes, Australia has one of the highest poverty rates compared with six similar countries. However, among older home owners, Australia has one of the lowest poverty rates.

http://www.afr.com/p/opinion/it_all_depends_on_home_ownership_dHPJCmMkAJZxGyVao9EfAM

No one wants to suffer through old age. Home ownership provides some security and definite benefits for retirees.

This is one fundamental reason why we should encourage people to embrace home ownership.
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hoofarted
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Yes ... But at what cost?
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themoops
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I wonder how those home "owners" who get fucked over in the crash will fair in their old age?
Edited by themoops, 18 May 2012, 11:04 AM.
stinkbug omosessuale


Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments.
Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck!
See here
Property will be 50-70% off by 2016.
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NotFooled
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The Bear Whisperer

themoops
18 May 2012, 11:04 AM
I wonder how those home "owners" who get fucked over in the crash will fair in their old age?
Doesnt matter. If its their PPOR, they'll still fair much better than renters.
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newjez
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NotFooled
18 May 2012, 11:19 AM
Doesnt matter. If its their PPOR, they'll still fair much better than renters.
Aren't they just saying that there is a greater divide between the rich and poor in Oz rather than the other 6 countries? I assume one of those countries was Germany, where wealth is not measured by owning your own home?
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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NotFooled
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The Bear Whisperer

newjez
18 May 2012, 11:45 AM
Aren't they just saying that there is a greater divide between the rich and poor in Oz rather than the other 6 countries? I assume one of those countries was Germany, where wealth is not measured by owning your own home?
Interesting. Do you think that is true? I thought it was pointing out the preferential treatment for home owners.
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Elastic
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It's a circular argument.
People who are poor can't afford to buy their own home so they are much more likely to be in poverty when they retire. They are not necessarily poor as a result of not buying their own home.
Only a rat can win a rat race.

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jester77
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Elastic
18 May 2012, 12:49 PM
It's a circular argument.
People who are poor can't afford to buy their own home so they are much more likely to be in poverty when they retire. They are not necessarily poor as a result of not buying their own home.
+1

Not to mention you would need tro consider the relativity of the argument. Supplanting rent for a massive mortgage isn't exactly a path to riches anymore.
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peter fraser
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NotFooled
18 May 2012, 11:19 AM
themoops
18 May 2012, 11:04 AM
I wonder how those home "owners" who get fucked over in the crash will fair in their old age?
Doesnt matter. If its their PPOR, they'll still fair much better than renters.
I think that this has been true in the past, but whether it remains true will depend upon what policies are put in place. EG I understand that in Germany the aged pension doesn't get paid until you have sold your home and used up most of your own savings, therefore what's the point of owning your own apartment?

Trying to second guess what a future government may do is tricky, but as it stands home ownership should have the benefit of saving the future impost of rent because the government here is pro home ownership.

If someone chose to accumulate savings instead of buying a home, they are then subject to a means test when they apply for an aged pension that a home owner with equal wealth isn't subject to.

In every game you just have to know the rules and use them to your advantage.



Edited by peter fraser, 18 May 2012, 01:02 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Strindberg
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from the op quote:
Quote:
 
Everything from childcare rebates, age pensions and capital gains tax excludes the political sacred cow of the family home.

It is a ubiquitous myth that the age pension eligibility excludes the family home. The ownership or not of a house IS taken into account in the eligibility and calculation of the age pension.

A renter couple are allowed greater non-house assets than a home owner couple before the pension is reduced or eliminated.

In some circumstances a renter couple have greater pension eligibility than home owners with less total assets (including the home) than renters.
A renter couple with total assets of $400k are eligible for a full pension (subject to a common income test).
A home owner couple with a house worth $100k and other assets of $300k are NOT eligible for a full pension. Their non-home asset limit is only $265k and their pension will be reduced.
Housing costs to Income broadly unchanged since 1994 - re-ratified here
The People of Australia have the highest median wealth in the World
2002-2012 10 year house price growth the SLOWEST since 1952-1962
"There are two kinds of people in this world: ones that fiddle around wondering whether a thing's right or wrong and guys like us." (Hugo to Gagin in Ride the Pink Horse)
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