Baby Boomers are starting a new trend, that is truly shaking things up within rental markets across the country. Australian home ownership is at the lowest level it has been at in 70 years, with just under one in three renting, according to official numbers. Many of those that choose to rent, adopt the communal lifestyle, by house sharing; and many of these house sharers are, in fact, Baby Boomers.
For many, in their late middle-age; the resources just aren’t available to purchase a property, especially in expensive cities like Sydney and Melbourne. A large portion of these Baby Boomers have found themselves in this position due to factors such as divorce, redundancy or inadequate pension; for others, the communal lifestyle is pleasurable, and there is a genuine want to spend their later years in a share-house. This is an emerging trend, where many are comfortable recreating the communal lifestyle of their youth, but with the nation at a demographic turning point – as over 5.5 million Baby Boomers move into retirement, this trend is projected to continue at a greater pace as time progresses.
Another major factor that is most definitely impacting the surge of Baby Boomers opting to live communally, is when an individual in their later years chooses to stay in the house they’ve always lived in, but due to factors such as death and divorce of their partner. These individuals need assistance in the upkeep of the property. For many of these Baby Boomers, the finances of their situation were maintained by their partner. By losing their partner, their finances have also been affected. Individuals may choose to offer a room within their home for rent, for the prospect of remaining within their home; welcoming the rental income, as well as the communal lifestyle. With more and more opportunities arising for older individuals to seek the communal lifestyle, rising demand is being met, and more so emphasizing this trend.
Something to consider here is the tax treatment of income and expenses for the homeowner who opts to rent out part of their house. Rental income must be included in tax returns, and even though deductions can be claimed; you can only claim expenses related to renting out that part of the house. This means you cannot claim the total amount of the expenses – you need to apportion the expense.