The kids have grown up and half the bedrooms in your home are empty, the mortgage is crippling and the cost of heating and cooling the big house is frightening.
As one respondent to REIWA’s Housing Issues Survey said: “I have six single friends, all in our 60s. Collectively we have 26 bedrooms and use seven. We have 17 bathrooms and use seven. We all want to downsize. Stamp duty is a barrier to our downsizing, as is the lack of smaller, stand-alone villas.”
REIWA president Suzanne Brown says that while downsizing might seem the obvious choice there are barriers to selling the big house and buying something smaller.
“Perhaps you want to travel and want a place you can lock-up and leave. You would no doubt want to spend less time maintaining a house and garden and more time enjoying yourself,” Ms Brown says.
“There are many reasons people decide to downsize whether financial, to be close to family, declining health, or simply a change in scenery. Downsizing can also be a great opportunity to declutter and get rid of extra possessions or increase your cash flow.”
Ms Brown says REIWA supports policies that enable people to downsize, but it is a deeply personal choice and people should be able to downsize when they are ready. REIWA does not support punitive policies such as a vacant bedroom tax.
“Our members regularly speak with homeowners who would like to downsize, however in WA there are several barriers to downsizing.
“The WA property market has experienced very strong price growth in recent years. Downsizing is not necessarily the financial windfall people might think. Downsizers may receive a premium price on their current home, but they can expect to pay a premium price on their next home.
“And, as many downsizers tell us they would like to downsize to a more modern home, there is often not a significant difference between the price they receive for their existing property and the price they pay for the new one.
“Adding to financial considerations are stamp duty costs. A 2025 Housing Issues survey undertaken on reiwa.com found 63 per cent of respondents reported stamp duty was a barrier to downsizing. For many potential downsizers, the prospect of paying tens of thousands of dollars in upfront transaction costs is a clear deterrent and the alternative is to remain where they are.
“Downsizers also tell us they would like to stay in their local area, but there is a lack of suitable homes. Anecdotally, many indicate they would prefer medium density options, such as villas and townhouses, rather than apartments.”
REIWA has called for a $10,000 stamp duty concession for eligible downsizers in its 2026–27 State Budget submission to help support those who wish to downsize.
“Enabling people to downsize would also encourage some much-needed mobility within the WA property market,” Ms Brown says.
REIWA also supports a stronger focus on medium-density housing options, such as villas, townhouse and home units, when it comes to urban infill. This would increase housing supply in established suburbs, while providing desirable and more affordable housing options for downsizers.
There may be tax and pension implications involved.
From January 2023, the ATO allows those over 55 to contribute up to $300,000 ($600,000 for couples) from the sale (or part sale) of their home into their superannuation fund.
For those on an Age Pension, it is important to consider the implications of downsizing.
“While your residence is not included in the assets test, the difference between the sale of the old and new properties will be considered and may reduce your weekly pension. It is always important to seek legal or financial advice before making any decisions,” Ms Brown says.
“We know it can be difficult to decide what to do with the family home. It is filled with memories and can be hard to let go. It is important to make an informed decision, so do your research, speak with family and friends, and seek legal/financial advice as the first steps on your downsizing journey.”
Land-lease communities, often called lifestyle villages or over 55s communities, are an option often considered by downsizers.
They differ from a traditional retirement village in that the resident owns the home but leases the land from the community owner.
“This has a range of benefits for those looking to downsize. It is more affordable than purchasing a dwelling and land as you are not paying for the land component. In addition, you do not pay stamp duty on the purchase. This can mean significant cost-savings for downsizers.
“You also do not pay council rates or strata fees. These costs are usually addressed by the site fee.
“Another benefit is that for some, the cost of leasing the land may be offset by government rent assistance.
“When you sell, as with downsizing to a traditional home, any capital gain is yours.
“Land lease communities generally offer resort-style living, with pools, gyms, tennis courts, clubrooms and workshops on site for residents’ use. These features can be very attractive to downsizers, and the costs to use and maintain these facilities are usually covered by the site fees.
“As with any property purchase, it is important to do your own research and base your decision on your needs. Considerations include whether the lifestyle is suitable, your likely use of the facilities such as the pool and gym, the social aspects of the community, whether there are rules around children and grandchildren staying, and rules around pets.
“If you are likely to need a certain level of ongoing medical care, you may be better off choosing a retirement village.
“When it comes to finances, while you will save on the purchase of the home, you will need to pay an ongoing site fee so you need to ensure you can afford this. There is also the potential for site fees to increase during your tenure.
“It is also essential to get legal advice to ensure you fully understand the terms and conditions of the contract, including the fees – how often are they reviewed, and the security of tenure – how long is the lease and what factors could see this change. Also, when you decide to sell, can you choose the agent or are you bound to use one the community owner specifies?
“It is a significant decision, and one that shouldn’t be rushed.”
Next month: REIWA’s tips for downsizing.
