There can be a number of reasons for downsizing your home, living somewhere more manageable and user friendly, or freeing up equity to fund a better lifestyle in retirement.
A smaller home can require less upkeep – freeing up more time for friends, family and leisure activities.
It can also mean lower maintenance costs such as house painting, watering lawns and gardens, and lower council rates. Utility costs such as heating and cooling can also be considerably reduced. There is also the prospect of moving from a multi-storey house to single-level living, which can be worth considering even if mobility issues are not a problem right now.
One of the most important reasons for downsizing can be freeing up the equity in your property. However, there can be costs involved in downsizing that may eat into your profit margin. There are real estate agent fees, moving costs, property inspections, conveyancing costs and stamp duty.
There are suggestions that the Federal Government could announce measures in this year’s Budget aimed at providing more incentives for seniors to consider downsizing, which could make the move a little more appealing.
Currently, many older Australians are discouraged from downsizing by the fact that they can lose some, or all, of their welfare payments and concessions by releasing the equity in their home.
The proposal currently being considered for the Budget would allow downsizers to quarantine up to $250,000 from the asset test after selling their family home.
There are other non-financial considerations before you leap into the downsizing lifestyle. Moving house is considered one of life’s most stressful events and there is also the emotional attachment to a family home.
Your current home may be close to family, shops, health professionals and transport, and the ability to buy a smaller home in a similar area might not be an option.
What are your thoughts on downsizing? Is it something you are considering? Have you already downsized?
Seniors Housing Online is currently running a survey on downsizing intentions and will use the results to inform policy-makers. The survey is completely anonymous and you can go into the draw to win a $100 visa card.