The kids have moved out and it’s time to think about what you want in a home.
Perhaps you want to travel and want a place you can lock-up and leave. You would no doubt want to spend less time maintaining house and garden and more time enjoying yourself.
There are many reasons people decide to downsize whether financial, to be close to family, declining health, or simply a change in scenery. Downsizing can also be a great opportunity to declutter and get rid of extra possessions or increase your cash flow.
It is a significant decision, and one that shouldn’t be rushed. To help make the process easier, REIWA has put together a list of questions to ask yourself.
How much space do you need?
There are many options when it comes to downsizing, such as an apartment, lifestyle village or just a smaller house.
Will you need an extra bedroom for family or friends to stay, will you be working from home, do you need space to pursue a hobby?
Some empty nesters face an unexpected twist if an adult child wants to move back home due to a relationship breakdown, financial distress or job change.
Some retirement villages have age restrictions on who can stay in the home, so make sure you look into this if you plan to have grandchildren sleep over.
Storage space is also important to consider. Do you need plenty of room for books, ornaments or other treasured belongings? Many apartment buildings provide residents with a store room, while a retirement village or small house may have a garage where you can store extra items.
Location, location, location
Location is a very personal choice. Do you want a property that is close to family or friends, public transport, cafes or medical facilities? Do you want to remain in the area you know and love? Are you looking for a sea-change or wanting to escape the city altogether?
REIWA’s interactive maps allow you to view a range of information about an area from planned changes to roads, proximity to community amenities, and bushfire or flood zoning. You can also map the journey time to your frequently visited places.
REIWA’s suburb profiles also enable you to compare different suburbs to see data on property types, demographics, median sale and rental prices, distance from the city and more.
If you don’t know an area well it could be worth renting before buying so you feel confident in your choice.
What amenities do you need?
Apart from location, is there anything specific you’re looking for in a residence?
Many new apartment buildings feature swimming pools, gymnasiums or even cinemas. You will pay strata fees for these facilities, so be sure you will use them.
Some lifestyle/retirement villages may have restrictions on items you can bring in or have limited facilities, while others may include a range of in-house services such as hairdressers, coffee shops, libraries and games rooms.
Think about future-proofing your home
Thinking about the future, it is worth considering mobility and health.
Would a single-storey home suit you best so that you don’t need to navigate stairs? If you’re looking at townhouses or multi-level homes, do they have a lift or the provision to add one later?
Features like wide hallways and doorframes, and hob-less showers are important for wheelchair access.
There may be tax and pension implications involved.
From January 2023, the ATO allows those over 55 to contribute up to $300,000 ($600,000 for couples) from the sale (or part sale) of their home into their superannuation fund. For those on an Age Pension, it is important to consider the implications of downsizing.
While your residence is not included in the assets test, the difference between the sale of the old and new properties will be considered and may reduce your weekly pension. It is always important to seek legal or financial advice before making any decisions.
We know it can be difficult to decide what to do with the family home. It is filled with memories and can be hard to let go. It is important to make an informed decision, so do your research, speak with family and friends, and seek legal/financial advice as the first steps on your downsizing journey.
Sourced from REIWA