Downsizing your home
With the recent Federal Budget announcing potential superannuation and taxation benefits to people who sell their family home and downsize to a smaller property, it might be tempting to consider selling up and moving on.
When reaching retirement age, there can be thoughts of downsizing your home to free up extra funds for retirement or to move to a smaller, low-maintenance property. Not to mention seeking a new lifestyle or activities that you’ve been putting off, golf anybody? There is a lot to think about when considering downsizing; it will affect your hip pocket, heart strings and social life. As well as the hard facts of moving to a new house, you should also consider your emotions – especially if you’re moving from a family home to a new place. Here are some things to consider:
Firstly, assess your current home.
A helpful way to determine whether your new home will meet your new requirements is to take stock of your existing home – both the physical space you have available and what you like to do in your home currently.
If you live in a large house with a lot of things taking up space you could try putting them into a spare room and locking the door for a few weeks. If you don’t need the item during the period of time the room is locked, perhaps a spring clean and a garage sale are in order.
Do you entertain guests in your home, or do you have grandchildren or other family stay over regularly? If you are used to having a garden or outdoor entertaining area to host events, you may miss having this space available for entertaining.
What lifestyle do you currently lead and how could this be impacted when you downsize?
How do you spend your free time? What do you want your lifestyle to look like as you retire and get older? Do you want to take up golf, cycling, or bee-keeping? Or you may be excited for more time to experience cultural events and festivals.
Are you considering moving to a new area?
If you’re considering a sea change, or a tree change, consider if there is easy access to a capital city or regional centre to access healthcare facilities. You might be considering moving across the city or closer in to the centre of town. Even a small change to your scenery can make a big impact on your day-to-day life.
If you are looking to move to a new area, it’s important to think about family, friends and your existing networks. Will you miss people or will you be able to regularly visit and maintain these important relationships? Building a support network can take time, but smaller towns can be welcoming and offer opportunities to build new relationships.
What are the real estate conditions when you’re looking to buy and sell?
The real estate market can dictate whether it’s an appropriate time to buy or sell. We recommend getting specialised advice from professionals with a good knowledge of the areas where you’re buying and selling property.
Selling your home could impact your pension or super.
There are significant tax and superannuation implications associated with buying or selling a property, especially during retirement. Consider getting financial advice from a professional as they will be able to give you the full picture before you make any major decisions.