To sell or not to sell?

For many Australians, the family home is their largest asset. And if you’re planning to wind down from work, you may be considering what you’ll do with yours.

Like many people, you may have worked for a lifetime to build the value you hold in your family home. While selling your home may not be your first choice, if your super balance is low this may be one way to release funds to help pay for your retirement. Or the idea of selling may be liberating – you may be ready to move and keen for a new adventure.

Either way there are financial, practical and emotional factors to consider first. Many people who sell up and move expect to have more money left than they end up with.

Things to consider

If you’re thinking of moving to release money from your home, planning ahead can help you feel more in control and provide greater peace of mind.

Consider:

1. Making a wish-list before looking for a new place. Buying the right home means you’re less likely to need to move again. Think hard about what features you need in your new home and what you can live without, as the more proceeds you have leftover can help fund your retirement.
2. The best location for now and the future. Remember you may need to access services and community support down the track so you may not want something which is too isolated.
3. Selling your existing home before buying another, although this may not be necessary if you can afford to hold two properties. Make sure you consider any potential capital gains tax implications if you own more than one property. While you don’t have to pay capital gains tax on the sale of your primary residence, this is not the case for an investment property and you can’t have more than one primary residence.
4. The costs of moving. For example stamp duty, real estate agent fees and property styling.
5. The impact of selling your home on any pension entitlements you may have.
6. Renting or house-sitting before buying in an area that’s new to you.
7. Investing conservatively while you are house hunting so you give yourself some flexibility as you learn more about the choices and trade-offs involved in choosing the right property.

It’s never too late to explore your options. And if time is on your side then planning ahead can help you to:

• uncover the opportunities available to you
• consider keeping your home and perhaps using it to generate income
• tidying up your key asset before selling so you can maximise its value
• manage your money from the sale—your home may be exempt from the assets test but a rise in your bank balance could reduce pension entitlements
• explore new locations that you may not have considered in the past

Regardless of your timing, it’s always a good idea to speak with your financial adviser about the options for uncovering value in your home and creating a better retirement.