Tax incentives to downsize

  1. They simply can’t envisage life elsewhere, the homes they raised families in are too deeply a part of their life and they don’t want to leave.
  2. They like having extra rooms free so that if family come to visit they have a place for them to stay including grandchildren having a place to cared for and play (where children might live in an apartment or the grandparent is a childminder for the grandchild).
  3. They lack cash to buy a smaller home and there is no bridging finance available.
  4. The accumulation of things is too much for a smaller home, furniture and the like, sometimes ‘where would I put all my things’ is the first hurdle.
  5. Property tax is too low — there are no incentives to change. As well as this many feel that holding on to a home is a way to pass on wealth when they die (which is true), or to fund a care home should it be necessary (such as ‘fair deal’).

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Karl Deeter

Karl Deeter

Mortgagetech CEO, financial analyst and journalist