By the time you have adult or independent kids, you could have substantial equity in your home. You may even own your home outright.

Selling the family home

Selling up and downsizing into a smaller more manageable home is one way to free up cash. The surplus can be invested in shares, term deposits, managed funds or superannuation.

But if you're thinking about downsizing, don’t forget the cost of buying and selling in the same market. Removal costs, stamp duty, legal fees, estate agent fees and inspection fees all add to the cost of downsizing.

According to the three main expenses are conveyancing costs, marketing and agents fees (or commission) that can range from $4,000 to $10,000.

In addition to finding a place to live, there are many financial, practical and emotional factors to consider before putting up the 'For Sale' sign.

Capital gains and selling your home

Generally speaking the family home is exempt from capital gains tax. The property must have a dwelling on it and you must have lived in it.

However, there are still a number of misconceptions in the market place regarding capital gains tax on the sale of your home. The ATO's website has a lot of information around these sorts of issues and will assist you to understand more about whether your property sale is or is not exempt from capital gains tax.

Find out more on capital gains tax

Need advice?

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Alternatives to selling the family home – reverse mortgages

Selling the home where your children were raised and leaving neighbours and friends can be difficult and stressful. Staying put mightn’t be such a bad idea after all. And there are a number of alternatives to selling that you can consider:

  • You might be able to convert your home to dual occupancy so you can live in one half and rent or sell the other half.
  • There's been an increase in homeowners building granny flats around Australia. There are many benefits to this, including accommodation for your extended family, providing a home office, or for generating rental income.
  • Perhaps you could rent out a spare room or two.
  • Maybe a reverse mortgage could work if you need extra cash and have solid equity in your home.

A reverse mortgage is a type of home loan that allows you to borrow money using the equity in your home as security. The loan can be taken as a lump sum, a regular income stream, a line of credit, or a combination of these options.

Interest is charged like any other loan, but you don't have to make repayments while you live in your home. The interest compounds over time and is added to your loan balance. And you continue to be the owner.

You must repay the loan in full (including interest and fees) when you sell your home or die or, in most cases, if you move into aged care.

While no income is required to qualify, credit providers are required by law to lend you money responsibly, so not everyone will be able to obtain this type of loan.