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// New Article: The Perks of Downsizing

Author

Garry Bradburn
August 29, 2024

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The Perks of Downsizing

To sell and downsize can be a big emotional decision and a big financial one. Many people will struggle with one more than the other and deciding where to live in retirement is an important decision. Deciding to downsize means you have a chance to live where you always dreamed of.

Many Australians downsize their home when they retire, or in the lead up to retiring, motivated by a lower maintenance lifestyle or to make a sea or tree change. There are pros and cons to weigh up, but if you do decide to make the move, you may be able to take advantage of the Federal Government's down-sizer contribution.

By downsizing for example, to a small townhouse on the Gold Coast worth $900,000 you could pay off your home loan in Melbourne or Sydney and start retirement debt free. According to new figures from the Association of Superannuation Funds of Australia (ASFA) Retirement, single retirees require super savings of $545,000 to afford a ‘comfortable’ lifestyle in retirement, while couples need $640,000. When downsizing, buying a smaller home and putting the remainder in super, can allow you to continue to take advantage of the benefits of the super environment by opening an Income account and drawing a regular, tax-free* income to suit your needs. This way, your money remains invested, and the risk of spending all your savings at once is minimised. You still have the flexibility to withdraw lump sums whenever you need, like for renovations or a holiday.

How it works

If you’re 60 years or older, and meet the eligibility requirements, you may be able to make a downsizer contribution of up to $300,000 to your super from the proceeds of your home. You can make the downsizer contribution whether you’re still working or already retired, as long as you meet the criteria. Each owner can contribute up to $300,000 (so a total of $600,000 for couples) as long as the total doesn't exceed the proceeds of the sale. You also have the option of splitting the amount between your accounts.

These are the sort of perks that are available to Australians that Buy Off The Plan Online keep updated with and are excited to share with our clients.

Contact us today to discuss your goals and how we can help you.

Buy Off The Plan Online