Downsizing stamp duty tax reform on Federal Treasurer's agenda

The Federal Treasurer Scott Morrison is canvassing tax reforms that will persuade retirees to downsize into smaller homes in a move to boost the housing supply for younger families.

The bold plan - revealed in The Australian - would need state government support as it would include a one-off exemption from stamp duty on the purchase of the smaller home.

It speculates as an extra incentive, profits from the sale of the family home would be excluded from the Age Pension assets test provided they are channelled into an ­approved retirement product such as life annuities and aged-care bonds.

The Treasurer's tax white paper team are expected to have the reform proposal included in the draft to be released next year.

Mr Morrison will begin discussing stamp duty exemptions at his next meeting with state and territory treasury ministers in December.

The ACT introduced a discounted stamp duty for pensioners downsizing in 2008, and the commonwealth hopes other states follow.