Before you sell the family home: the questions that cost retirees most

Selling the family home is usually the biggest financial decision of retirement, and it is often made in a hurry. The costs of getting it wrong are rarely visible on the day you sign.

It usually starts with something small. A fall on the back steps. A garden that has quietly become a weekend’s work. A son or daughter who says, over Sunday lunch, “Mum, have you thought about somewhere smaller?”

Within weeks, a brochure is on the kitchen bench. Within months, a contract is signed.

For most older Australians, the home is the largest asset they will ever own. Yet the decision about what to do with it is often made faster, and with less comparison, than the choice of a new car. The marketing is polished, the open days are friendly, and the numbers that matter most are buried in documents few people read in full.

This is not an argument against downsizing. For many people, moving is exactly the right call. It is an argument for doing the arithmetic first, on every option, before anyone is asked to sign anything.

A decision a quarter of us make, at a price few tally

Downsizing is common. Research for the Australian Housing and Urban Research Institute (AHURI) surveyed 2,422 Australians aged 55 and over. About 26% had already downsized, and another 29% said they might.

The same research found that many downsizers did not end up where they expected. Two-thirds still had at least one spare bedroom, and more than half moved into homes with three or more bedrooms. For many, “downsizing” meant a different home, not a smaller one.

The cost of moving is rarely small. In Sydney, stamp duty alone on a median-priced home of about $1.75 million is close to $80,000. Agent’s commission, legal fees, removalists and the cost of setting up a new home all come on top.

The Property Council of Australia put the full cost of moving in Sydney at almost $75,000, including stamp duty, back in 2017. Prices have climbed a long way since. That money comes straight out of the equity a move is meant to free up.

Where it goes wrong

The most expensive surprises rarely show up in the brochure. They show up in the contract, years later, or at the Centrelink counter.

The exit fee you agreed to on day one. Many retirement village contracts charge a deferred management fee when you leave, calculated on how long you stayed. CHOICE reported in 2024 on a Queensland couple who paid $326,000 to move in and were told they would lose $87,000 in exit fees if they moved out, plus the cost of restoring the unit. A Victorian resident faced exit costs of around $128,000 on a $400,000 entry price.

The fees that keep running after you leave. CHOICE has also found that residents or their children generally keep paying fees on a vacated unit until it is resold, and that the balance of the ingoing contribution can take months or longer to come back. The rules differ by state. Western Australia’s 2022 reforms, for example, now require exit entitlements to be repaid within 12 months.

Site fees that rise every year. In a land lease community you own the home but rent the land. Site fees are reviewed over time, and in NSW, residents can only challenge an increase as a group, with at least 25% objecting, through mediation and then the tribunal. Disputes over fee rises are a recurring story in the sector.

The pension you didn’t plan for. Your home is exempt from the Age Pension assets test. The cash from selling it may not be, once it is not going into a new home. Services Australia gives an exemption of up to 24 months, extendable to 36, for proceeds you plan to use on a new home for homes sold from 1 January 2023. Money left over after the move can count against you.

The super rules with a clock on them. If you are 55 or over and have owned the home for 10 years or more, you may be able to put up to $300,000 per person into super as a downsizer contribution. It generally has to be done within 90 days of settlement, and you can only do it once. Miss the window and the option may be gone.

None of these is a scandal in itself. Each is disclosed somewhere. The problem is that they arrive separately, in different documents, from different people, and rarely in the same conversation.

The rules keep moving, and so do the rumours

This year has given older Australians plenty to worry about, and not all of it is accurate.

“Death taxes.” Australia has had no inheritance tax or estate duty since death duties were abolished across the country by the end of the 1970s. The May 2026 Budget brought in a minimum 30% tax on some new discretionary trusts from 2028. The Opposition called it a “death tax by stealth”. The Treasurer rejected that, saying deceased estates and existing testamentary trusts are exempt. On 21 September 2026, asked directly whether an inheritance tax was being considered, Jim Chalmers said no.

The tax that does exist. There is one tax many families only meet after a death. Super paid to a financially independent adult child can be taxed. The taxable part is typically taxed at 15% plus the 2% Medicare levy, and some parts at up to 32%. On a $1 million balance, one adviser estimated, up to $320,000 could go in tax. A downsizer contribution into super can change that picture, for better or worse, depending on who inherits.

The $3 million super tax. Division 296 took effect on 1 July 2026. It adds tax on realised earnings for balances above $3 million. Most retirees will never be affected. Those near the threshold should check before putting sale proceeds into super.

Aged care. The new Aged Care Act took effect with Support at Home replacing Home Care Packages from 1 November 2025. Under it, people contribute towards the services they use. Whether you stay at home with support, or move, now changes what you may pay later.

The pattern is the same each time. A headline creates fear, the fear creates urgency, and urgency is the worst state in which to sell a home. The detail of each rule matters far more than the noise around it.

What doing your homework actually looks like

The people already living in these communities point one way: compare before you commit. Residents surveyed for the 2023 Catalyst Satisfaction Index, more than 10,000 of them, mostly looked at three or more sites before choosing. National Seniors still warned that contract simplicity and transparency have a long way to go, and recommended specialist legal advice before signing.

Good homework is not complicated. It is mostly a matter of order.

Compare all the options, not just the one in front of you. Staying put with support, buying smaller, a land lease home and a retirement village each leave you with a different amount of money and a different set of ongoing costs. Put them side by side before you visit anything.
Work out what each move leaves you with, not what it costs. Sale price minus agent’s fees, stamp duty, moving costs and entry price. Then the ongoing fees, and what you or your estate get back on exit.
Check the pension and super effects before you sign. A move that frees up cash can reduce a part pension. A downsizer contribution has a 90-day window.
Read the exit terms first, not last. Ask what you would get back if you left after two years, five years and ten.
Take your numbers to a professional. A solicitor for the contract, a licensed financial adviser for the money, Services Australia’s Financial Information Service for the pension. Arriving prepared makes those meetings shorter and more useful.

It is worth saying plainly: none of this is a reason not to move. AMP’s 2026 research found 58% of Australians worry about running out of money in retirement. For many, unlocking home equity is the answer. The homework simply makes sure the answer is the right one for you.

Where a planning tool fits, and where it doesn’t

A calculator cannot tell you whether to move. It cannot read a contract, judge a community or replace a solicitor or financial adviser. Anyone who says otherwise is selling something.

What a good planning tool can do is the arithmetic, early, before the brochures and the open days. It can put the options side by side in one place, so the questions you take to a professional are the right ones.

That is why we built Launchup. Our founder, Martin, saw the gap first-hand when his own elderly parents needed help cleaning up and reorganising their affairs. The information families need was scattered, inconsistent and hard to compare.

The free Retirement Pathway Calculator gives a quick, no-sign-up comparison of four options: staying home, buying smaller, a land lease community and a retirement village.
The Retirement Move Report ($49.95, one-off) goes further, with a detailed picture of what each move could leave you with. It is designed to be taken to your adviser, solicitor or family as a pre-meeting planner. It comes with a 14-day money-back promise.

Start with the free check at launchup.com.au. Do the sums before anyone asks you to sign.

General information only. This article is not financial, legal or tax advice and does not consider your personal circumstances. Rules differ between states and change over time. Please speak to a licensed financial adviser, a solicitor and Services Australia before making a decision.

Sources

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