Selling up the family home can make sense when you are older. You may be rattling around in a big house, once needed for a growing family who have long moved on.
If you move to a cheaper, more compact home or to a "cheaper" area, you can unlock some extra funds for the retirement years. It can be rewarding and liberating to sell your safe-haven home and free up some cash to have options such as exploring the world.
There are even tax advantages if you put a downsizer contribution into your superannuation fund.
Of the quarter of Australians who are over 55 and downsize their homes, 27% do it for financial reasons while 27% do it for lifestyle. A further 18% say the maintenance of the garden and house became overwhelming and was the main consideration for selling, while 4% cash in their home to help their family, according to the Australian Housing and Urban Research Institute (AHURI).
But selling the family home needs to be carefully thought out. Almost 30% of people over 55 consider downsizing but don’t, the AHURI found.
There is a lot to weigh up before you sell, says Mark McShane, director of Chrysalis Lifestyle Planning. He recommends researching all the costs and being clear about what you want to achieve.
“People underestimate the costs such as stamp duty, agent’s fees and getting the house ready for sale. That’s when you have to really sit down and work out what do you want to do in life, where you want to go – all the quality stuff,” says McShane.
Smaller may not be cheaper
This story is from the August 2023 edition of Money Magazine Australia.
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This story is from the August 2023 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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