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Navigating downsizing

You may have spent years (and a significant amount of money) making your current home your “forever home” so thinking about downsizing can be hard. It helps to offset any sadness about leaving with excitement about your new home and the happy times to come. Like any big decision getting your downsizing decision right is going to take some research.

Know your why?

Understanding why you want to downsize is a crucial first step. Knowing what you want to leave behind, what you want to keep and those things you want to change helps you understand the driving force behind your decision. You may want a different lifestyle and seek a “sea change” or “tree change” or you may simply want a low maintenance home in your current community. There can be financial reasons too: paying off debt, freeing up equity and reducing property related costs with the combined outcome being more time and money to spend doing the things you love.

Determine what you can afford

Moving costs money. While that may seem obvious, many people simply compare the price they are getting for their existing home with the price of their new one, but this is a recipe for disaster – because the cost of moving can easily run to tens of thousands. You need to break it down into selling, moving, and buying costs, this will make sure you are not left short when it comes to how much you will have available to spend or invest. 

Work out where

Where you live affects how you live and it’s something you can’t change without moving again. So, think about the people and places you want to be close to (or far away from). Whether it is family, friends, the beach or a favourite club identifying the people and places that you want to be close to can help you narrow down your Where.

Consider the accommodation itself, taking into account the spaces you'll need – a second bedroom if one person snores, a room for visitors, an outdoor space to enjoy your morning coffee – think about how you will live in the space.

And while you may be fighting fit now, it's wise to contemplate your future needs, especially if your plan is to stay in your new home long term. Ask yourself “What happens if I need care?”. Modern homes, including granny flats and those within retirement communities, are often designed with future care in mind. Look at your new home for potential access challenges, such as narrow halls and doorways and cramped bathrooms.

Few people plan to spend their days watching television, but if you don’t plan anything else that’s what you can find yourself doing. So when you’re thinking about where to downsize to ask yourself “How will I spend my time?”. If you are thinking about moving into a retirement community there is normally an events calendar, grab a copy and circle the activities that interest you.

Understand what you are signing

No matter what form your new home takes – whether it's a freehold, strata title, leasehold, licence, or a granny flat arrangement – you will need to sign a contract. Your contract spells out your rights, responsibilities, and costs. Your job is to ensure that you understand it and that it has a fair balance of these three elements.

Of all the downsizing options granny flat arrangements can be particularly complex as they involve family, are not necessarily on commercial terms and if it goes wrong the whole family can be affected.

Crunch the numbers

While the purchase price of your new home may be obvious there’s much more to consider.

In freehold or strata properties, you may need to factor in stamp duty, owners’ corporation fees, and the potential for special levies. While granny flat arrangements are typically with family that doesn’t mean they are free. In retirement communities, there is the weekly or monthly fee that you pay to live in the village and often there can be an exit fee.  Your exit fee will typically include a Deferred Management Fee (DMF) as a percentage of either your purchase price or future sale price and there can be shared capital gains or losses with the village operator, along with renovation costs, marketing and selling fees.

There is a simple exercise called the Ingoing, ongoing and outgoing that you can use to work out how much you will pay upfront, while you live there and when you leave.

Armed with the knowledge of what your new home is going to cost you can get a clearer view of the bigger financial picture. How much money will you have to invest or spend, how much Age pension (and other benefits) you can receive, your cash flow, and in the longer term your financial position should the need for aged care arise.

The Where and Why of your downsizing decisions are just as important as the contract you sign and its associated costs. Ultimately, getting good “bang for your buck” from your downsizing decision often comes down to how you invest your time and who you spend it with.

This is an edited extract from Downsizing Made Simple (2nd Edition) by Rachel Lane and Noel Whittaker. Downsizing Made Simple is available from and all good bookshops. The website also has lots of useful exercises, checklists and calculators to help you on your downsizing journey.


Rachel Lane is the Principal of Aged Care Gurus where she oversees a national network of advisers dedicated to providing quality advice on retirement living and aged care. She is also the co-author of a number of books with Noel Whittaker including the best-seller 'Aged Care, Who Cares?' and their most recent book 'Downsizing Made Simple'. To find an adviser or buy a book visit

Firstlinks readers are invited to celebrate the launch of the second edition of Downsizing Made Simple with authors Rachel Lane and Noel Whittaker. Places are limited, so book early. In various major cities from November 28 to December 7.


Jenny Winthrop
November 23, 2023

The biggest issue with downsizing for me is to convince my husband to do so. Any advice on this would be appreciated, except getting a new husband, of course...

November 24, 2023

I am in the same situation except that I am the husband who does not want to go. We live in a regional town and are within walking distance of dentist, doctor, physio, chiro, hospital, pathology services, local supermarket, parks and schools for kids and grandkids. It takes us 10 to 15 minutes to get to anywhere I need to go by car with most of this spent waiting at traffic lights. We have a pool and a walking track along the river with a salt water reach and a fresh water reach at the end of our no through road street. There is no traffic at night and lots of wildlife. Why would I want to leave?

Graham W
November 24, 2023

You have answered your own reason to make a change. As soon as you are not able to drive around you are in a world of pain. Make the change before you have to and need to settle for second best. Find somewhere nice while you can. Many folk move to regional areas after retirement but overlook that they had great holidays but are know not close to the much needed facilities that they both need. No drivers license, no lifestyle.

November 27, 2023

Not sure what you're on about there Graham. Peter sounds like he has a fabulous place to live. Each to their own though, but I would say there is more to life than just maximising one's finances by downsizing


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