Written by Sharon Mudiman
Changes in legislation mid-year meant downsizers over 65 are now eligible to invest up to $300,000 per person into their super from the sale of their family home. While there are key considerations when deciding if this is profitable for baby boomers, there has been an sharp increase in those over 65 enquiring and furthermore, actively selling their family homes. This change in legislation does not guarantee a flood of family homes hitting the market in the near future, but it does beg the question, what does this mean for daydreaming upsizers?
Well, most homeowners only consider upsizing in a thriving market, based on the golden rule of selling when the market is up. However, there are factors that argue that method of thought and suggest the sale of your home in a soft market with the direct intention of upsizing can have significant impact on lowering your overall costs. Generally, when the market is soft the prices are lower. When selling, this may hinder your sale price, however, a slower market also means a stronger position from which to negotiate a purchase. From a dollar standpoint, a lower sale price also means potentially less capital gains tax for investment property sales. At the same time, you will also enjoy a windfall of savings when upsizing to a larger home during a soft market by incurring lower stamp duty than when buying at a higher price in a booming market.
Additionally, from a marketing perspective, it is important to consider the timing of your sale when possible to ensure you don’t hit the market when its saturated with other homes. An excess of listings puts the power back into buyers’ hands with an abundant selection of homes to choose from and therefore stronger negotiating tools to work with. Competition drives a strong market, so for vendors, the less homes on the market at their time of sale the better, regardless of the season.
With so many considerations and an ever-evolving market, it is important to ensure you have all the facts and a balanced view of the current climate for sellers and buyers. For further information on how the current market is impacting buyers and sellers in our area, please feel free to contact one of our local area experts.
Sharon Mudiman, Licensee and Principal of Bespoke Realty Group (formerly Glenmore Park First National) has been negotiating the sale of property for over twenty-five years in the Greater Penrith Region .