There comes a time in many people’s lives that the children have left the ‘family nest’ and what was once a practical home for the full-sized family is no longer practical. In this situation, many Australians will consider downsizing to accommodation that better fits our new stage of life.
What many people don’t realise is that apart from all the decisions that need to be made about how much smaller our new home should be, or where we might want to move to, there are also some substantial financial benefits that are available to many downsizing Australians that can have a major impact on your retirement plans.
In 2018, the Federal Government introduced a program to give downsizers an added incentive to sell, with the aim of increasing the number of properties available for sale. The downsizer program some home sellers to make a non-concessional contribution of up to $300,000 per individual into their superannuation from the proceeds of selling their home.
In order to qualify for this scheme, you need to:
- Be 65 years of age or older;
- Have owned your home for a minimum of 10 years; and
- It must be your principal residence, (not a holiday home for example).
There are a couple of other criteria that need to be met, but these are the major requirements. The key is to seek professional financial advice to ensure you fully understand all the implications before making any decision.
For those who do not quite meet the age requirements yet, the good news is that the Government announced in this year’s Federal Budget that it is planning to lower the minimum age to 6o years from July 2022.
Of course, if you’ve been in your current home for ten years or more, the whole idea of selling up and moving to a more manageable property is likely to be a cause of some concern, particularly as the whole real estate market has changed markedly since you last sold a home.
The good news is that you can have a professional Vendor Advocate helping you every step of the way, and it won’t cost you any extra to have that level of protection. If you’d like to discuss how much easier the process of downsizing can be, you can give the team at Ian Reid Buyer and Vendor Advocates a call on 9430 0000.
You’ll also find lots of helpful suggestions for property sellers in our free booklet, “Fatal Real Estate Traps Exposed”