Downsizing from a large home to a smaller abode is not just a move popular amongst retirees. It can be a decision favoured by homeowners of all ages wanting a change.

Maybe your big four-bedroom house with its extensive gardens has become too big a job to maintain, or your children have fled the nest and there is no need for a vast backyard anymore. Whatever the reason it does pay to do your before you take the plunge to downsize and list your home on the market for sale or auction.

Here are some elements to consider as part of a decision to downsize your living arrangements.

Plan, plan, plan

Think about why you want to downsize. Are you retiring in the coming years? Do you simply want a smaller home? What are some ‘must haves’ for your new home? A new kitchen, a garage etc? Addressing the reasons why you are choosing this path can help you decide your budget.

The lifestyle benefits

Downsizing gives you an opportunity to buy a new property that is perfect for your needs. You can have a home with a layout and modern features you had always wanted. A smaller house or apartment will also mean a decrease in running costs such as electricity, gas, and water, which might sound really appealing with our cost-of-living expenses spiralling right now.

Government benefits and pensions

While your eligibility for the age pension is dependent on an assets and income test, your home is not part of the assets test. Upon selling your home, you have a 12-month exemption against the sale proceeds to give you time to buy again. However, the proceeds are considered in the income test.

Seek advice

Services Australia’s Financial Information Services is a handy free service for those wanting advice on their financial situation when it comes to downsizing and government payments. Visit www.servicesaustralia.gov.au

Or speak to a financial advisor to see what your options are.

To find more about the benefits of downsizing, contact your local Raine & Horne agent today.