When is the right time to downsize?

It’s estimated that over a third of over 50’s in Australia are looking to downsize their home–whether this means choosing a smaller home or relocating to a better area. Once the children leave and the house is quiet, it can feel like your large family home isn’t fit for purpose anymore. But selling a house is a big decision, and you want to ensure it’s the best decision for you.
Below, we look at what you should be asking yourself before you downsize, and how you know that selling the home is the right option for you.

Do you want to downsize?
The first question you should ask yourself is why you’re contemplating downsizing. You should be able to give reasons why selling the family home makes sense for you–don’t just downsize because it’s what you think you should do once the children grow up.

Remember, the family home has a lot of memories in it. You should be sure you’re ready to let them go before you move.

Do you need to downsize?
Even if you don’t want to sell the family home, you might feel like you need to. It’s important to consider the life stage you’re entering and what this means you’ll need. Just like you considered school districts and leisure facilities before choosing your family home, you should consider what you’ll need in the future to make your life easier.

Reasons you might need to sell your house include:

  • Struggling to climb the stairs or make full use of the house now
  • Moving somewhere with easier access to medical care and local amenities
  • Difficulty maintaining or looking after the home

What’s important to you in a new home?
This question goes hand-in-hand with the above. When downsizing, you need to decide what you like about your family home and what you need from a new home. Maybe you still want some garden space because you enjoy gardening or you need a large dining area because you love to entertain.

Remember, downsizing doesn’t simply mean buying a much smaller house. It means buying a new home which suits your new needs.

How are my finances?
It’s not always cheaper to downsize. You may be subject to taxes on the proceeds of your sale such as capital gains tax, and money released might affect your pension access. You’ll pay stamp duty on a new home, too, unless you buy within a retirement village.

Although NSW doesn’t have downsizing incentives, there are some available on a national level. These incentives include stamp duty concessions.

Moving home is a difficult process but it’s less stressful with the right team on your side. For more advice on this complex legal area, download our free ebook today.

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