If the kids have moved out and the family home now has more rooms than you use, downsizing could free up money and cut your upkeep. Whether it adds up depends on what's left after the costs of selling, buying and moving.

If you're 55 or older, you may be able to put up to $300,000 from the sale into super, and the money you free up can change your Age Pension. It's worth checking the money rules below, and talking it over with family, before you commit.

Downsizing is a significant life event and definitely shouldn't be rushed. Don't underestimate the emotional impact of selling the family home. If you're helping a parent decide, this guide is for you too.

Is downsizing right for you?

Downsizing could suit you if your home has become more than you need or want to look after, or if you'd like to free up some of the money tied up in it. There's no right age, though 55 is the earliest you can make a downsizer contribution to super.

It's far from the only path. AHURI research published in 2019 found most homeowners aged 55 and over don't downsize. Letting go of a home full of memories and belongings can be hard, and so can leaving neighbours and an area you know well.

Staying put is a real choice too. If you're of Age Pension age and want income from your home without selling, the government's Home Equity Access Scheme offers a voluntary, non-taxable loan secured against your property. It charges compound interest, so what you owe grows the longer the loan runs.

What would you have left after downsizing?

As a rough guide:

1. Start with what your home could sell for. An agent's appraisal, their estimate of the likely sale price, gives you a figure to work from.
2. Take off anything you still owe on your mortgage.
3. Take off the costs of selling, such as the agent's commission, marketing and conveyancing. Our guide to the cost of selling a house explains each one.
4. Take off what your next home will cost, plus legal fees and stamp duty, unless a concession applies (see the stamp duty section below).
5. Take off the cost of moving. Our guide to moving costs has typical prices.

What's left is the money you could put into super, keep as savings or spend.

The money rules when you downsize

Four sets of rules can apply: super, the Age Pension, stamp duty on your next home and tax on the sale.

Can I put the money into super?

If you're 55 or older, you may be able to put up to $300,000 from the sale of your home into super as a downsizer contribution. A couple can each contribute up to $300,000, as long as the total isn't more than the sale proceeds.

Money in super is preserved, so you generally can't take it out until you meet a condition of release, such as retiring after your preservation age (60 if you were born on or after 1 July 1964) or turning 65. If you're 67 or older, it's also counted when your Age Pension is worked out (see below).

According to the ATO's downsizer contributions page, all of these must apply:

• you're 55 or older when you make the contribution
• you, your spouse or a former spouse owned the home for the 10 years before the sale, in most cases counted from settlement to settlement (settlement is the day ownership passes to the buyer)
• the sale qualifies, at least partly, for the main residence exemption from capital gains tax (the tax on the profit when you sell). A home bought before 20 September 1985, when capital gains tax began, counts if the sale would otherwise have qualified
• contracts were exchanged, meaning you and the buyer signed the sale contract, on or after 1 July 2018
• the home is in Australia and isn't a caravan, houseboat or mobile home
• you contribute within 90 days of the change of ownership, usually settlement, unless the ATO allows longer
• you give your fund the downsizer form before or when you contribute
• you haven't made a downsizer contribution from another home sale, or from an earlier part sale of this one

A property you only ever rented out won't pass the main residence test, but a former home you later rented out can. If you're selling a rental, see our guide to putting an investment property sale into super.

A spouse who isn't on the title can contribute too, and you don't have to buy another home. You can make a downsizer contribution even if your age, your work status or the usual yearly limits would stop other contributions, and even if your super balance is already high.

A downsizer contribution isn't tax-deductible, but it does count towards your total super balance afterwards, which can affect other contributions you make later.

How does selling affect the Age Pension?

Your pension is worked out under two tests: one on what you own (the assets test) and one on your income (the income test).

Your home isn't counted in the assets test, whatever it's worth, and nor is up to 2 hectares of land on the same title. Any part used only for a business is counted. Once you sell, the money is counted, except the part you plan to put into your next home.

According to the Department of Social Services' Social Security Guide:

• Money for your next home. The part you intend to spend buying, building or renovating your next home isn't counted in the assets test for up to 24 months from settlement, as long as you still intend to. You're still treated as a homeowner for that time.
• More time, in some cases. That can be extended by up to 12 months, to 36 months in all, but only if you made reasonable efforts within 12 months of the sale and were held up by delays outside your control.
• It still earns deemed income. Deeming is how Services Australia works out income from your financial assets, such as savings and shares: it assumes they earn a set rate, whatever they actually earn. All of the money kept for your next home is deemed at the lower of the two rates, 1.75 per cent from 20 September 2026.
• Money you don't intend to spend on a home is counted as an asset straight away. All your financial assets together are deemed at 1.75 per cent on the first $66,800 for a single person, or $110,600 for a pensioner couple, and 3.75 per cent above that.
• Super isn't counted until you reach Age Pension age, which is 67, unless it's already paying you an income. From then it's counted in both tests, including any downsizer contribution. If you can't access your super, you may be able to have it exempted.
• If you get the Age Pension, tell Services Australia within 14 days of selling your home.

Whether you own your home also sets how much you can have before your pension starts to fall. Selling and renting long term can move you to the higher non-homeowner limits.

Above these limits, your pension falls by $3 a fortnight for every $1,000 over, until it stops at a cut-off point. Services Australia's assets test page has the current cut-offs, which are reviewed in March, July and September each year.

Before you decide, Services Australia's free Financial Information Service can explain how a sale would affect your payments.

Is there a stamp duty concession for downsizers?

In most of Australia you'll pay stamp duty on your next home at the usual rates. Two states and a territory have concessions that can help older buyers, each with its own rules:

If you're buying in NSW, Queensland or Western Australia, there's no seniors or pensioner concession, and the Northern Territory lists none. In Queensland, the general home concession can still apply if you're buying a home to live in.

Tasmania's pensioner downsizing concession ended for former homes settled after 30 June 2025. Our guide to who pays stamp duty explains how stamp duty works in each state.

Do I pay tax when I sell the family home?

Not if it's been your home the whole time. If it's been your main residence for as long as you've owned it, hasn't been used to earn income and sits on 2 hectares or less, the ATO's main residence exemption means no capital gains tax on the sale.

If any of that isn't true, part of the gain may be taxable. And if you're a foreign resident when you sell, you generally can't use the exemption.

If you've heard about the capital gains tax changes from 1 July 2027, they don't affect the main residence exemption. Our guide to the tax implications of selling property covers when part of the gain is taxable.

If you buy your next home before you sell, the main residence exemption can cover both homes for up to six months. The old home must have been your home for at least three months in a row in the year before you sell, and not used to earn income in any part of that year when you weren't living there.

If you're an Australian resident, you'll also need a clearance certificate from the ATO, whatever the price. Without one, the buyer must withhold 15 per cent of the price. The ATO suggests applying as soon as you're considering selling, because it can take up to 28 days.

Where could you move?

Where you move changes more than your lifestyle. It also changes how the pension treats your money.

Renting

Renting gives you time to try an area before you commit. If you plan to buy again, the money you set aside for your next home still isn't counted in the assets test for up to 24 months (see above).

If you rent long term and no longer own a home, you're a non-homeowner, so the money from the sale is counted against the higher limits above. If you get the Age Pension and your rent is above a set amount, Rent Assistance can be added to your payment.

An apartment, villa or townhouse

If you buy in the same area, the gap between what you sell for and what a smaller home costs may be small, as Moneysmart's downsizing in retirement page points out.

Many apartments are strata titled, so you share the building's common areas and pay levies, regular fees towards their upkeep. Before you buy, read the strata records and the by-laws (the building's rules), and ask what the levies are.

A retirement village

You usually pay an entry contribution to move in, ongoing fees while you live there and a fee when you leave. Village rules are set by state law, so they depend on where you buy.

The fee when you leave is often called a deferred management fee. In Victoria it's a percentage of what you paid to move in, up to a cap set out in the contract, such as 3 per cent a year to a maximum of 30 per cent.

For Victorian contracts from 1 May 2026, the fee is worked out daily and stops when you hand back the home (Consumer Affairs Victoria).

Services Australia recommends getting legal advice before you buy into a village.

For the Age Pension, your entry contribution decides whether you're treated as a homeowner. It's compared with the "extra allowable amount", the gap between the homeowner and non-homeowner limits, which is $267,000 from 1 July 2026.

• Pay more than that and you're treated as a homeowner. The entry contribution isn't counted, but you can't get Rent Assistance.
• Pay that amount or less and you're a non-homeowner. The entry contribution is counted as an asset, and Rent Assistance may be possible.

Once you live in the village, your former home is counted in the assets test if you still own it.

Moving in with family

Moving in with family, or into a granny flat on their land, can help you share costs. If you pay for the right to live there for life, with money or the title to your home, Services Australia treats it as a granny flat interest.

As with a retirement village, the amount you pay is compared with the extra allowable amount to decide whether you're treated as a homeowner.

Usually that payment isn't treated as a gift. But a "reasonableness test" applies if you pay towards a home that's already built, with no building work, or transfer extra assets as well. Anything above what the test allows counts as a gift.

Anything you give above $10,000 in a financial year, or $30,000 over five financial years, still counts as your asset, and earns deemed income, for five years, whether you're single or a couple. The gifting rules will also apply if you move out within five years for a reason you could have expected.

On the tax side, since 1 July 2021 there's generally no capital gains tax for individual property owners when a granny flat arrangement is created, changed or ended.

To qualify, the arrangement must be in writing, legally binding and not commercial (paying market rent makes it commercial). The person living there must also have reached Age Pension age or have a qualifying disability. The exemption covers the arrangement itself, not a separate transfer of the property (ATO).

Before you go ahead, Services Australia recommends putting the arrangement in writing and getting financial and legal advice.

A move to the country or the coast

Before you go, spend time in the area in different seasons, and check how far you'd be from family, friends, a hospital and a GP.

Aged care. If a move into aged care is on the cards, our guide to helping a loved one downsize into aged care covers that move, and you can read how Lisa used OpenAgent to sell her parents' home quickly so they could make the move.

Selling the family home, step by step

1. Get the facts first. If you get, or expect to get, the Age Pension, talk to the Financial Information Service. Ask your super fund whether it can accept a downsizer contribution, and see a licensed financial adviser if your situation is complex.
2. Find out what your home is worth. Ask two or three local agents for an appraisal. It's also a good time to apply for your clearance certificate, which can take up to 28 days.
3. Decide the order. Selling first means you know your budget. Buying first can suit some sellers, and the tax section above covers the six-month overlap. Our guide to the benefits of buying before you sell sets out the case for it.
4. Declutter early. Start months ahead, room by room. Sell, donate or pass on to family what won't fit, and consider a professional organiser if the decisions are hard.
5. Choose your agent (see below).
6. Sign the sale contract with your buyer. For capital gains tax, the sale happens on the date of the contract, not at settlement, so that's the financial year it counts in.
7. Watch two deadlines. If you get the Age Pension, tell Services Australia within 14 days of selling. Make any downsizer contribution within 90 days of the change of ownership, usually settlement.

Choosing an agent to sell a long-held home

If you've lived in your home for decades, it may be a long time since you last sold. Ask each agent what they think your home will sell for and why, which similar homes nearby they've sold recently, how they'd market it and what they charge.

Our 10 questions to ask a real estate agent help you compare them, and you can compare agents in your area on OpenAgent. For the whole process, see our guide to selling.

Where these rules come from

Rules, limits and rates as at 27 October 2026, from each agency's own pages.

• Downsizer super contributions and GN 2018/2, the downsizer guidance (ATO)
• Principal home sale proceeds, Social Security Guide 4.6.3.90 (Department of Social Services)
• Assets test for Age Pension, real estate assets and deeming (Services Australia)
• Granny flat interests, gifting and Rent Assistance (Services Australia)
• Granny flat arrangements and CGT, capital gains tax reform and clearance certificates (ATO)
• State Revenue Office Victoria, RevenueSA and the ACT Revenue Office, linked in the table above
• Fees and charges when leaving a retirement village (Consumer Affairs Victoria)
• Understanding downsizing (AHURI, 2019, updated 2022)