Downsizing

Downsizing – where you sell the family home and move into a smaller and more easily maintained property – has a lot of benefits for empty nesters (parents with kids who have moved out of home) and those looking for a more relaxing journey towards or beyond retirement. Ultimately, it’s the perfect excuse to build a dream new home that is purpose-built to suit the next exciting phase of your life!

Five reasons to downsize your home and upsize your life!

Save money

Selling the family home and buying or building a newer, smaller home means you can pay off a significant chunk of your existing mortgage – or in some cases, pay it off completely. With the proceeds of the sale, you can buy an amazing new home that better suits your future needs, or purpose-build a dream home that will perfectly fit your life stage and style for the next 30 years.

Don’t pay unnecessary tax

A big benefit of selling the family home is there is no Capital Gains Tax (CGT) payable on the sale of your primary place of residence – which means more money in your pocket to invest in buying or building your dream home in the perfect location.

It’s time for a lifestyle change

Generally, people choose to downsize because of a significant lifestyle change – for example, the kids have left home and you’re now starting to plan for life after retirement. Not being bound by work can free you up to live where and how you’ve always dreamed – whether that’s a seachange, treechange, interstate move or simply a change of suburbs.

Space is going to waste

When the kids leave home, you’re left with a lot of space. This can mean that bedrooms, rumpus rooms and potentially even entire floors are no longer used. This is not only a waste of space (that someone else would love to get to utilise), but it is a lot of extra effort to maintain these areas.

Lower your living costs

If you buy or build a new home, you can enjoy significantly lower living expenses compared to maintaining a larger family home – for example, having a smaller area to cover and using the latest energy-efficient appliances and design ideas can drastically lower your heating and cooling bills, giving you more money to enjoy life

Downsizing Q&A

What is Downsizing?

Downsizing involves selling the family home and using the proceeds to purchase or build a smaller and more easily maintained property. As downsizing usually follows a significant lifestyle change – kids moving out of home or reaching retirement age – you can ensure your new property better reflects your lifestyle needs for the next 30 years.

When should you consider downsizing?

Downsizing is ideally suited to empty nesters (parents with kids that have (finally!) moved out of home) or those looking for a more relaxing journey towards or beyond retirement. As your obligations around schools and work fade away, you are free to explore living in an area that best suits your goals for the next stage of life.

What are the steps involved in downsizing?

The first step is to decide where you want to live. Will you stay in the same area, or consider a seachange or treechange? Next, you should review your finances to develop a clear idea of what you can afford. As part of this, get your property valued so you know how much you’ve got to play with when exploring downsizing options. Then you need to think about your timing – whether you buy or build before or after selling your current home. There are risks involved in buying or building before you sell your current home, so carefully weigh up your options. Last but not least is downsizing your stuff – it’s time to free yourself from all the things you hang onto but no longer use.

Should you buy or build before selling your current home?

You’re always better to hold off committing to a new purchase or build until you’ve sold your current home, as selling afterwards can cause several issues. Will you have the cash flow to pay for the new house before you get the funds from the sale of your current house? Will you overestimate what your current house will be worth, meaning you may have a cash shortfall? Will you actually have more money from the sale than you expected? What unforeseen expenses may arise, and will you be able to cover them?