Selling the family home can often be an emotional battle but it is also a matter of timing. The family home is steeped in memories and this can be the biggest hurdle to jump when making the decision to downsize. Timing can play an important role in helping older homeowners avoid the minefield of financial and emotional concerns that stop them selling their family home at the best possible time.
Constraints on selling the family home
The two big factors that stop many from selling their family home are emotional and financial.
Financial constraints – Those who are post-retirement often face some major financial hurdles that deter them from selling the family home.
1. After selling, changes to entitlement to pension and asset tests can make a difference. Pensioners are also taxed for the cash released upon selling the house.
2. To purchase elsewhere there are the upfront costs of moving as well as stamp duty tax.
3. Moving into a high rise or retirement village may involve ongoing costs with strata fees etc.
Emotional constraints
1. There is the basic emotional effect of leaving the family home. Packing, moving and sorting through a life time of possessions can be something many homeowners put off until the above financial constraints move in.
2. The wish to remain in the same area can restrict what smaller properties are available to them.
A way to avoid becoming weighed down by any or all of these constraints is to make the decision to sell the family home sooner rather than later. The 2017 Federal budget opened up more opportunities for retirees, however, when it revealed plans for those over 65 to put the proceeds of the sale of the family home (as long as you have owned it for at least 10 years) into super, at a maximum of $300,000 per person.
Whatever is decided it is important to check the financial ramifications on pensions etc by consulting a financial adviser.
Ref: view.com.au