Inheritance, Housing, Wealth and Social Policy - Some Intergenerational Issues

Judith A. Davey

By retirement most people own their own houses outright, making older people asset rich and income poor. It is a widespread expectation in societies like New Zealand that property will be transferred from an older generation to a younger, usually after death, and much of this inheritance will be tied up in a house.

However, the general ageing of populations is putting pressure on governments to take account of housing equity when seeking to reduce their level of support to older people.

The aim of this paper is, firstly, to explore intergenerational issues in New Zealand Pākehā urban society related to inheritance and the transference of property from the owners to their heirs. The use of capitals assets has wide implications for people’s expectations about giving and receiving inheritances, although studies have shown a strong desire on the part of older people to “not be a burden”, which suggests some willingness to mobilise housing wealth to supplement income.

Secondly, it examines the significance of housing wealth and inheritance for social policy. Governments may require the mobilisation of assets  to pay for long-term care and possibly to supplement income in retirement, so it is important to consider its implications, especially with respect to intergenerational equity.