Downsizing—Moving into a Smaller Home
Downsizing means moving into a smaller home.
Homeowners downsize for a variety of reasons. It’s more common for retirees to move into smaller properties, but younger people also downsize for a variety of reasons.
There are advantages and disadvantages to moving into smaller living spaces. Financially, a smaller home may reduce utility costs, property taxes, homeowners insurance and your mortgage payment. Downsizing may free up time that was spent on yard work and house cleaning.
If you meet IRS requirements, you may be able to take advantage of a tax-free gain of up to $250,000 when you downsize. Consult a tax advisor for information and to advise you on all IRS requirements. Weigh all financial and non-financial effects before making a decision.