Craig Hall from NICRI responds to a question from YOURLifeChoices member Tony, who would like to know if there are pitfalls to downsizing.
We’re thinking about downsizing and would like to know if there are any financial pitfalls we should consider beforehand?
A.Provided by Craig Hall, NICRI
Moving house, whether it be upsizing, downsizing or simply moving to a new location, can provide all sorts of challenges despite it often being done to enhance one’s lifestyle quality.
As with most major events in your life there are not only advantages but also possible pitfalls that come with moving house. From a financial point of view the cost can be significant. Items that contribute to this cost include stamp duty (this amount can vary depending on the applicable state/territory rules and the purchase price of the property), real estate agent fees, moving costs, property inspections, costs for preparing the existing home for sale, borrowing costs such as loan interest, establishment and loan service fees, mortgage registration fees, conveyancing costs, etc.
Downsizing may not necessarily produce surplus funds if you buy in a more desirable area, an area with superior amenities, a property that requires work to make it suitable or simply a better quality home.
For those receiving Government Income Support special rules may apply with regard to the means test which may also impact entitlements. Refer to the Department of Human Services website www.humanservices.gov.au.
There are other potential non-financial or ‘lifestyle’ pitfalls which should also be considered, so it is important to fully research all the items listed above so that you can be confident that downsizing is worthwhile.
If you require further information on financial matters that may concern senior Australians please contact NICRI toll free on 1800 020110, email [email protected] or write to PO Box 1339, Fyshwick ACT 2609. NICRI information leaflets are also available on its websites www.nicri.org.au © and //moneymap.nicri.org.au.