Selling the family home - When is the right time?

 

Selling the family home

When is the right time?

August 8, 2017

In large urban settings, this is a key question for many families, but it can be an especially poignant decision for elders, that is, those over 65 years of age, regardless of where they reside. When is the best time to sell this significant asset? Downsize to a bungalow? Move to a new condo? What about a retirement complex that provides extra services?

For the elderly, this question carries a great weight. Perhaps they have raised their family in this home and enjoy entertaining the grandchildren in the large backyard. The loss of independence is devastating to many seniors. 

But at some point, despite market trends and housing prices, a decision must be made to sell the family home and move to accommodations more appropriate to aging lifestyles. Ultimately, this is a lifestyle and financial choice.

Creating a financial plan

From a financial planning standpoint, the sale of the house does not typically attract any tax concerns. When a real estate asset is sold a capital gain will be realized, however Canadian residents may be able to shelter the capital gain from taxation when the principal residence is sold by claiming the Principal Residence Exemption. Further, by selling the house prior to death, the asset will not pass through the estate, thus avoiding probate fees on death.

All elders can benefit from a detailed financial plan to anticipate future care and lifestyle costs and the possible benefits of selling the home and investing the proceeds for future care needs.

Selling the family home can have a significant impact on the financial realities of living a long lifetime, but more emphasis should be placed on the individual’s goals for independent living and community connections.


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