Downsizing, Explained

What is Downsizing?

Downsizing is when you sell your family home and use the equity to buy a smaller house that is more maintainable and in turn, can reduce living expenses. Your family home is a place that will always be cherished. It’s where you have celebrated milestones, laughed with loved ones, and watched children grow but as you enter your later years many homeowners find their homes upkeep become more of a burden than a joy.

Downsizing from your large home is an opportunity to find financial freedom, live in your dream location, and enjoy a thoughtfully designed, low-maintenance home created specifically for over-50s living.

Knowing Your Downsizing Options

When planning for retirement there are many living options to consider from traditional homeownership, whether that be a house or an apartment, retirement villages, and land lease living communities. It is important to research and understand all of the options that are available so that you can make a well-informed decision.

Land Lease Communities

The land lease model is an affordable option providing the opportunity for you to live in a lifestyle rich location whilst leaving you with more money for the lifestyle you love. Whether you’re downsizing, retiring, semi-retired or looking for a lifestyle change, a land lease community is when a homeowner owns their home and leases the land within a community. These communities often have a range of amenities to support socially and active living with homes that are designed with flexibility and low maintenance living for those over 50.

There are a range of financial benefits when purchasing a home in a land lease community. Specifically, when purchasing your home in a Hometown Australia community you can save thousands with no stamp duty, no council rates and when the time comes to move you retain all capital gain. Plus, you might be eligible for government rental assistance, easing your budget even further.

Traditional Homeownership

Traditional homeownership is another option for downsizers who are looking for a smaller home such as an apartment or townhouse, that is much more manageable. There are financial costs to consider such as:

• Stamp Duty: Which could be between $20,000 and $72,000 depending on the property price.
• Council Rates: Averaging $700 – $1,800 per year, depending on the council and house value.
• Potential Strata Fees and Levies: When living in an apartment.

Why pay millions when you can enjoy the same lifestyle for less with the land lease living model? With the land lease living model, you can secure a home in a lifestyle-rich location without paying the million-dollar price tag that comparable locations market. *Homes prices vary depending on location.

Retirement Villages

A retirement village could be the right fit, if you’re looking for a community that focusses on care and medical support. Most retirement villages offer communal spaces however many don’t have recreational amenities on offer such as tennis courts, lawn bowl greens, and gymnasiums. retirement villages charge entry and exist costs, Deferred Management Fees (DMF), and share in capital gain which could result in all or part of the profit of sale.