A RATE rebate scheme in which Adelaide City Council will forego up to $1.75 million to attract new residents could have enormous benefits for older downsizers looking to maximise funds for retirement.

The council is offering free rates for five years to buyers of off-the-plan apartments contracted between July 1, 2017, and June 30, 2019.

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To be eligible, purchasers must have the apartment as their primary place of residence within six months of settlement.

Buyers will need to apply for the rebate and are only eligible for it for as long as they live in the apartment.

A council spokesman says the median rates bill for a unit or apartment in the city is about $1500 a year, making the rebate equate to a saving of about $7500 over five years.

“We anticipate that several hundred people could benefit over the life of the scheme,” he says.

“Assuming it is taken up in strong numbers, we could expect to forgo approximately $350,000 per annum over the five years.

“This scheme gives retirees yet another strong reason to come and live in the City of Adelaide and benefit from all that city living offers.”

The spokesman says the rate rebate would be particularly beneficial for older buyers.

“Like all of us, retirees need to spend their money carefully and five years without paying rates is a significant incentive,” he says.

Real Estate Institute of South Australia chief executive officer Greg Troughton says he is all for incentives for older buyers.

“We applaud it — people in the twilight of their housing lives need all the help they can get, and this rebate is a fantastic idea and supportive of the older generation,” Mr Troughton says.

“A total of $7500 is a significant saving for someone on a regular wage but imagine this saving for someone who is retired or maybe self-funded.

“That’s a huge amount of money and may well be the difference between enjoying those later years as opposed to struggling to make ends meet.”

Mr Troughton says retirees have been strong adopters of city apartments and he does not expect their demand for quality CBD downsizers to stop.

“There’s a lot of building going on,” he says.

“I know that early on there was some concern there was too much high rise going on but when you look at the prices for apartments, they’re heading in the right direction.

“So there’s clearly enough demand there and there’s enough supply there to encourage people to leave their homes in the suburbs and make the city their home.”

Terry McPharlin, 71, is downsizing from his Glenunga home to move to the Adelaidean apartment complex on Frome St, under construction and scheduled for completion in early 2020.

He says the decision to buy in the city was heavily influenced by the rate rebate.

“In looking around, it was difficult to find what I was looking for in the form of a freestanding house in the Norwood/Glenunga area and that drove the decision towards an apartment,” Mr McPharlin says.

“I must admit, the City Council’s rate-free deal ended up being a major deciding factor.

When I weighed up the various costs and benefits and everything else, that became quite a factor.”

He believes an apartment makes more financial sense than a retirement village.

He looked at retirement complexes but was concerned about costs associated with them and about what his estate might lose when the place was sold after he died.

“So that sort of ruled out the retirement living avenue for me and led me back to something you owned yourself.

“ I also thought once I passed on it would be something convenient, easy and simple for me to leave for the kids and they can do what they want at that time.

“In retirement living, you lose out quite a bit on overheads on their buybacks, whereas the apartment is a straight normal commercial real estate sale.”

Mr McPharlin says any incentive for older buyers is welcome.

“At that stage, people are very conscious of money and have concerns with how long superannuation will last and all the other costs associated with that,” he says.

“The dollars themselves are quite worthwhile, and every little bit helps.”

HOW IT WORKS AND WHO IS ELIGIBLE?
■ Buyers of an apartment in the Adelaide City Council area where a contract is signed before June 30, 2019.
■ It must be your primary place of residence and you must live there within six months of settlement.
■ The rebate is not applied automatically; you have to apply for it.
■ The rebate is administered for five years, but stops if you move out.
■ The owner needs to confirm they are the occupier of the apartment each year.
■ The rebate is not passed to someone else if you sell the property within the five years.
■ For more information, visit cityofadelaide.com.au