What to do with the family home in retirement
Written and accurate as at: Jun 15, 2026 Current Stats & Facts
It’s not easy deciding what to do with the family home in retirement. All the memories it contains will need to be weighed up against how expensive, time-consuming and physically demanding it can be to look after.
Some people will decide to stay put, while others will be eager to kick off retirement in newer surroundings. If you’ve begun to wonder whether the home you raised your family in will still suit you in your next stage of life, here are some options to consider.
Downsizing
If maintaining a large property no longer makes sense financially or physically, you might be able to sell your current home and buy a smaller one. The upside here is your property will be exempt from CGT – so long as it’s served as your main residence – so this would instantly free up cash to use for other purposes.
That might include holidays, an early inheritance for your children, or even making a downsizer contribution to your super to boost your savings and income for retirement. This is when eligible Australians aged 55 and over sell their homes and contribute up to $300,000 from the proceeds of the sale (or up to $600,000 for couples) into their super account.
Some things to consider:
- While the family home is generally exempt from the Age Pension assets test, money left over after selling generally counts towards your assessable assets.
- You’ll have to tick a few boxes to be eligible to make a downsizer contribution, including having owned your home for at least 10 years prior to selling it.
- Downsizing doesn’t have to mean moving into a much smaller home. Some retirees choose to buy a similarly sized house in a cheaper suburb or regional town. That could allow you to buy a similarly sized home while still releasing some capital from the sale.
Staying put
Even if the numbers point to downsizing, it might not be enough to pull us away from the home we built a life in. Factor in the friendships, routines and sense of community and parting ways with your home may seem almost unthinkable (especially considering how hard those things are to come by sometimes).
If you plan to remain in your home long term, make sure to think ahead about whether the property will continue to meet your needs as you age.
You might find some upgrades are necessary to improve accessibility and safety. Installing ramps, handrails, non-slip flooring or walk-in showers can help reduce the risk of injury and make sure you remain independent for longer.
Use it to fund your retirement in other ways
If holding onto your home is the right move for you, keep in mind there are still ways you can use it to generate an income. Here are just a few options.
- Take out a reverse mortgage: this allows you to borrow against the value of your home. Instead of making regular repayments, the loan balance typically increases over time and is generally repaid when the property is eventually sold.
- Use the Home Equity Access Scheme: this is a government scheme which lets eligible retirees receive voluntary fortnightly payments or lump sums using their home equity as security.
- Rent out part of your home: depending on the size of your home, you might be able to sub-let an unused room or two. This can provide a bit of extra income while making use of space that would otherwise sit empty.