Pensioners are being offered greater financial incentive to downsize their homes in an effort to free up housing stock. 

The federal government will introduce legislation to slash the deeming rate to 0.25 per cent.

Pensioners will also be exempt from an assets test for an extra 12 months after the sale of their principal property.

It means they’ll be given more time to purchase, build or renovate before their pension is affected.

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