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Downsizing for elderly

Zenify

A relative of mine is in her 70s living alone in a large house with a very large garden within the commuter belt of Dublin. She spent a lot of money about 6 years ago getting it ready for her retirement. However, she has now realised that the property is too big and difficult to maintain with her old age.

She now wants to move into an apartment. She does not want to sell the house as it's been in the family for a long time but it looks like this will be her only option to afford apartment living.

What is the best thing to do with renting/selling/buying with her house and future apartment?

Do family's in apartments ever do a temporary swap? as I see this as the best solution here (she's not interested in making profit from the situation)

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beauf

Its impossible to answer that without knowing how the "family" feels about. Very easy to cause some upset that can last for generations. You've no way of knowing if the relative might need care, or home help in the future. So any "profit" should be set aside for that.

Lumen

Is there a relative who would be prepared to buy it from her for their own use, perhaps at a discount to reflect a share of inheritance brought forward?

If there isn't, either because they don't have the money to buy it, can't afford to maintain it, or don't want to live there, it would be best for her to (in the nicest way) let go of the idea of passing it on, as soon as possible, so that she may get on with enjoying her retirement living somewhere more suitable.

beauf wrote: »

Its impossible to answer that without knowing how the "family" feels about. Very easy to cause some upset that can last for generations

IMO there's a bit of moral duty of offspring to help their parents mentally adjust in this situation by making clear that they don't feel they have any kind of right over the property or proceeds from it. "You bought it, it's yours to use as you see fit, we'll love and support you whatever you do". Even if they don't feel that way.

Spanish Eyes

There should be grants available for people in this situation.

For example, remodelling the house into two self contained units, one downstairs for the elderly person, and another upstairs.

The house stays in the family, the rent from the upstairs flat covers a gardener and a cleaner and a few bob to bump up the pension.

I'd love to do that with this house, as it also is too big for our needs now. Don't want to sell as I love the area and have terrific neighbours. I could not afford the cost of refurbishment though, and at my age I wouldn't get a mortgage either.

Stuck! But not unhappy really, would like the option.

[Deleted User]

Spanish Eyes wrote: »

There should be grants available for people in this situation.

For example, remodelling the house into two self contained units, one downstairs for the elderly person, and another upstairs.

The house stays in the family, the rent from the upstairs flat covers a gardener and a cleaner and a few bob to bump up the pension.

I'd love to do that with this house, as it also is too big for our needs now. Don't want to sell as I love the area and have terrific neighbours. I could not afford the cost of refurbishment though, and at my age I wouldn't get a mortgage either.

Stuck! But not unhappy really, would like the option.

I'm really not sure that this situation would be a priority for State funding to address. It's really up to the person and family themselves to sort out.

Those advising this lady should encourage to look after her own needs first. If renting out her house and using the income to rent an apartment works for her, by all means, go for it. Make sure she looks into the tax impacts of renting.

beauf

Renting isn't a hobby for the faint of heart. If you have a bad tenant is will cost you a fortune not to mention the stress of dealing with it.

beauf

Lumen wrote: »

I...IMO there's a bit of moral duty of offspring to help their parents mentally adjust in this situation by making clear that they don't feel they have any kind of right over the property or proceeds from it. "You bought it, it's yours to use as you see fit, we'll love and support you whatever you do". Even if they don't feel that way.

Oh definitely. But some might see it as a solution to one problem, young family in a small apartment, single older person in a large house. Considering the was mention of a "swap". But that has all sorts pitfalls. Not least that you are generally living in a place you can afford. If you are offered help to swap you should consider that the larger property might too much in tax, repairs and running costs for the younger family.

newacc2015

Personally I would try to explain to her that selling her house is the best thing to do. The fact is most homes of older people are not suitable for modern living. There is a reason why older people homes tend to be gutted, as they arent to modern tastes. You will rent it in this market, but the rent you get might not be great considering it might be dated. Plus when you factor in tax, maintenance etc, she might not even have enough to rent an apartment. If she sells it now, it will be CGT exempt.

I would try convince her to sell the home on the grounds that another family be able to have the amazing memories that she had there and that none of you want to live in it. The fact is even if one of you moves into it, I think even the best families will have issues and tensions over whether or not you paid a fair price to buy out your siblings. I have friends whose families are selling their farms before they die and giving their children cash as they can't trust their family not to fight over the dividing of assets. It might be better for the family unit if the house was sold and there was no dispute over whether the dividing of assets was fair.

You can buy some amazing new build apartments now and plus she can decorate it to her taste. Where as if she rents somewhere, she will have to adjust to the fact she is living with the landlords tastes. Plus if she sells her house she will have money for nurses and other medical expenses as she ages.

The_Conductor

Vis-a-vis renting out the larger house- any rental income would be subject to tax at the person's marginal rate- you cannot offset renting out your sole property- against renting a more appropriate property for yourself.

I.e. the elderly person would have to pay tax on their gross rental income- and then rent elsewhere from their net income.

Fyp- property tax, is not tax deductible- many costs are- but the main deductible cost for most property owners is 75% of mortgage interest- and presumably the elderly person does not have a mortgage.

The very best solution here for the elderly person- would be to sell the property and purchase a more appropriate property elsewhere- and ringfence any capital the transaction releases to cover any expenses they might encounter in their latter years (medical, nursing home costs etc).

[Deleted User]

Some great advice in the past two posts there.

In addition, buying a new property, apartment or maybe bungalow or cottage would give the lady the opportunity to future-proof her environment against possible future health issues. She could get a full wet-room bathroom, which can still be done in a nice stylish way, and can still be accessible for wheelchair or maybe even hoist in the future. She can ensure she has level entry and nice wide doors, ensure she has a sleepover room for a carer, ensure she has wiring in place to support additional technologies and alarms. Lots of opportunities really....

okiss

I would agree here what the other posts have said.

This lady would be better off selling the family home.
I know she may not want to do this but why is she living in place that is not suitable for her needs. She may be on a limited income so she can't afford to to enjoy her life ie charge a car or have an odd holiday due to the cost of maintaining this house.

If she sells the house, she can buy an apartment or bunglow and have a wet room ect. She will have lower bills and still have savings. She can enjoy her life and go on holidays ect when her health is still good.
No one is wishing her poor health ect but for some people they can end up with poor health or life limiting health conditions as they get older.

CollyFlower

If I was her I would just sell up and buy a smaller place and have a few bob in the bank. No need to worry herself about 'keeping it in the family' to me that's just very old fashioned, really why do older people want to 'keep it in the family' ... I know someone who was left a house but the will stated that it can never be sold and has to be kept in the family, they're still in the house, don't know if things have changed if they want to sell or if they're stuck to the wishes of that Will.

Denny_Crane

CollyFlower wrote: »

If I was her I would just sell up and buy a smaller place and have a few bob in the bank. No need to worry herself about 'keeping it in the family' to me that's just very old fashioned, really why do older people want to 'keep it in the family' ... I know someone who was left a house but the will stated that it can never be sold and has to be kept in the family, they're still in the house, don't know if things have changed if they want to sell or if they're stuck to the wishes of that Will.

Elderly people now might have been the first in a generation to own. My parents (who aren't even that old) were the first in their direct line to own. We take it for granted (or at least the lucky majority), they see it differently.

Unfortunately the only way to get get larger properties back onto the market is taxation.

beauf

Denny_Crane wrote: »

...Unfortunately the only way to get get larger properties back onto the market is taxation.

A much better way is to build more them.

Instead of attacking the vulnerable in society, for no reason at all.

The_Conductor

beauf wrote: »

A much better way is to build more them.

Instead of attacking the vulnerable in society, for no reason at all.

You can't just keep building sprawl though- the attitude just keep building- is what has people on quite ridiculous commutes of 3-4 hours to and from work. Hell- it can take you over 2 hours some mornings to get into Dublin from Lucan- and thats barely 10 miles away.

We do need reform of our taxation systems- however, residential housing is a special case- and the elderly in particular, do deserve special treatment. By that I mean we need to incentivise them to move to more appropriate accommodation- and then make damn sure that the more appropriate accommodation is available where and how they want it.

We need to invest, either publicly or privately, in retirement villages- like they have in a lot of countries- where every facility and amenity is available to the elderly- normally for life- at which time the unit reverts back into the community again.

Holding onto a big cold house that is eating funds from every which direction- is nuts.

I accept people develop an emotional attachment, rational or otherwise, to property- however, us Irish have an almost unique psyche towards property- and its a vicious circle that needs to be broken.

We already have some of the highest inheritance tax rates in the world- kicking in at artificially low levels- and its not working. We need to look at this from a different direction.

Chuchote

AndrewJRenko wrote: »

I'm really not sure that this situation would be a priority for State funding to address.

Could cut the housing problem considerably, though.

newacc2015 wrote: »

Personally I would try to explain to her that selling her house is the best thing to do.

Ah, the joy of being old, with a lifetime's experience and wisdom plus the added benefit of the young explaining things to you!

Pkiernan

Denny_Crane wrote: »

Unfortunately the only way to get get larger properties back onto the market is taxation.

The lunacy of the left exposed again.
It's her house and you want to force her out .

The_Conductor

Pkiernan wrote: »

The lunacy of the left exposed again.
It's her house and you want to force her out .

I was going to say 'no-one wants her out' of her house- but thats not entirely true. Many of us simply have the best interests of our elderly at heart- there are damn few of these properties that are easily heated, converted for someone whose stairs skills may not be the best and may be deteriorating, or indeed- don't soak up ridiculous amounts of funds to stop them falling down.

Its not left lunacy (for most people)- its an honest attempt to try and help people migrate in later life into property more suitable to their needs- simultaneously freeing up funds to do with as they will. If this includes buying a nice apartment in a resort in Portugal where they'll live 6 months of the year- well, bully to them.

Personally I think it is cruel that many elderly people live in penury in large old houses, because they don't feel that they have any other viable alternates- and to be brutally honest- many of them do not have any other viable alternates- we need to make sure that they see that they do have alternates- and invest money, time and effort- in redesigning how people view retirement and their latter years.

Any development in our larger urban centres- has to be focused on high density housing units- with impeccable access to facilities and amenities- we do not have the luxury of building these rambling older houses with their half acre gardens any more. However- if an elderly person does not want to vacate their larger rambling property- so be it- but they have to be shown that there are very appealing alternates- none of this boot them out the door and grab the property lark- more- make damn certain there is a great alternate available to them and give them every opportunity to avail of it- if they decide not to- then so be it.

jlm29

Who would own the house after she departs? Does she have a few children, or just one? I find it interesting that she's struggling to keep the house in the family now, but there's a good chance that after she dies her family will have their lives set up in different areas etc, and may neither want nor need that house.
My Mam is talking about downsizing, and while it would break my heart to see someone else living in her lovely house, it's essentially none of my business. She could keep it, and struggle to maintain it, and eventually when she dies, we would have to sell it anyhow, because neither me nor my sister would be in a position to buy it. Or she can sell it, buy a small bungalow in town and do what suits her now.
Of course, if there is someone who plans on moving back to the house eventually, then they could try and buy the house now or some such thing.,

Chuchote

jlm29 wrote: »

Who would own the house after she departs? Does she have a few children, or just one? I find it interesting that she's struggling to keep the house in the family now, but there's a good chance that after she dies her family will have their lives set up in different areas etc, and may neither want nor need that house.
My Mam is talking about downsizing, and while it would break my heart to see someone else living in her lovely house, it's essentially none of my business. She could keep it, and struggle to maintain it, and eventually when she dies, we would have to sell it anyhow, because neither me nor my sister would be in a position to buy it. Or she can sell it, buy a small bungalow in town and do what suits her now.
Of course, if there is someone who plans on moving back to the house eventually, then they could try and buy the house now or some such thing.,

Sure, or she could do a deal with a family member to move in and give her a bit of company, if that happened to be possible.

The apartment-in-Portugal idea sounds lovely - in theory - but try it yourself. You might find you'd be lonely.

Zenify

Thanks everyone for the great posts. A few have asked about her selling to children/relatives. She doesn't have any children and approached me about buying it (nephew). I would like the house to stay in the family as my grandfather built it. However, it is not near my life. I think the best thing now is for her to sell it.

She was looking at renting a 2 bed apartment in a retirement home (Gory). Rent was 18k per year which seems a little crazy to me. It is indepent living but near support if needed. I would also worry about her running out of money there as the current house would sell for around 250k.

Lumen

The_Conductor wrote: »

We need to invest, either publicly or privately, in retirement villages- like they have in a lot of countries- where every facility and amenity is available to the elderly- normally for life- at which time the unit reverts back into the community again.

Retirement villages sound to me like a kind of hell.

I'd prefer to live somewhere with a mix of ages. Having shops/services and public transport options within walking distance isn't a need specific to the elderly.

There is a lack of decent apartments at affordable prices; this affects young and old.

The_Conductor

Zenify wrote: »

Thanks everyone for the great posts. A few have asked about her selling to children/relatives. She doesn't have any children and approached me about buying it (nephew). I would like the house to stay in the family as my grandfather built it. However, it is not near my life. I think the best thing now is for her to sell it.

She was looking at renting a 2 bed apartment in a retirement home (Gory). Rent was 18k per year which seems a little crazy to me. It is indepent living but near support if needed. I would also worry about her running out of money there as the current house would sell for around 250k.

18k per annum- does sound a bit ott.
At that sort of price- she might be better off buying an apartment elsewhere- in a well developed area- while it may not be an 'independent living' type scenario- it might work out better for her.

Is 250k an accurate price- given house price inflation over the past 18 months outside of Dublin? Depends entirely on the location and the property- but seems to be significantly on the lower end of what might be expected.

Also- if she is doing as she proposed- get her to invest in some good tax and inheritance advice- it may be the best investment she ever makes- there is no point in the taxman unnecessarily eating up any capital she might have.

She needs some good advice to be honest- the sums have to add up- its all well and good her moving to another property- however if she simply swaps one form of penury for another- its entirely pointless.

Go get comprehensive independent advice on this- you will have to pay for it- but its the best investment you/she will ever make.

Chuchote

Zenify, friends of mine moved from a big, beautiful, awkward house with a huge garden to an apartment in a quiet suburb near their sons. They're ecstatic with it. They have a good doctor, when they need him, in the same apartment block, a good supermarket underneath, lovely parks nearby and it's warm and comfy. And their cat loves it!

Would your aunt think of selling and buying, rather than selling and renting?

One problem with this is that she'll be crucified with stamp duty - if the government wanted to release a lot of big houses for families they could offer a deal where stamp duty was written off for elderly people downsizing. But it still sounds like a better deal than renting in Gorey, where she probably knows no one. Gorey's lovely if you're young, but I'd say could be a bit bleak for the old.

The_Conductor

Lumen wrote: »

Retirement villages sound to me like a kind of hell.

I'd prefer to live somewhere with a mix of ages. Having shops/services and public transport options within walking distance isn't a need specific to the elderly.

There is a lack of decent apartments at affordable prices; this affects young and old.

Retirement villages- with a doctor and nurse on call 24/7 and social activities and excursions laid out every week- with a variable level of participation for residents (you can decide what you want to do- you're under no obligations) along with assistance (a driver, shared cars, etc etc) and the ability to live between the unit and another location (such as a holiday apartment in Portugal/Spain) works very well in most other countries- I can't see why we couldn't get over our abhorrence of this type scheme here- and at least give people the option to trial it and see how it works.

It is actively sought by elderly people in other countries- to the extent that demand massively outstrips supply- if it is done properly- there is no reason it couldn't be the same here.

In ye olde days- the eldest boy and his wife- took in the boys parent(s) perhaps moving into the parent(s) home and looked after them. This doesn't happen anymore- regardless of whether our elderly people aspire to be looked after by children, or not. Times have moved on. We need to move on with the times- and redesign how we look after our elderly- but in a manner that they are happy with too...........

beauf

The_Conductor wrote: »

You can't just keep building sprawl though- the attitude ....

That's a different issue. Population increases you need more housing. End of.

You can't make the elderly homeless through tax because you want their house. They often can't move into more suitable housing, because it doesn't exist.

beauf

The_Conductor wrote: »

..Times have moved on. We need to move on with the times- and redesign how we look after our elderly- but in a manner that they are happy with too...........

Yes but you need that in place BEFORE you tax them into an early grave.

As none of this exists, it's not relevant to the OP topic.

The_Conductor

beauf wrote: »

That's a different issue. Population increases you need more housing. End of.

You can't make the elderly homeless through tax because you want their house. They often can't move into more suitable housing, because it doesn't exist.

Build it then- as I said- high density units with access to amenities and facilities. You're selectively quoting some of my posts- but ignoring others.

The_Conductor

beauf wrote: »

Yes but you need that in place BEFORE you tax them into an early grave.

As none of this exists, it's not relevant to the OP topic.

We're taxing everyone into early graves- its nothing to do with the elderly- and I specifically said they should be incentivised- which you've deliberately ignored.

The OP needs to go offline- get a good independent financial advisor and tax consultant- before they do anything- and then, and only then- go looking around and see if they see something of interest to them.

Pkiernan

The_Conductor wrote: »

I was going to say 'no-one wants her out' of her house- but thats not entirely true. Many of us simply have the best interests of our elderly at heart- there are damn few of these properties that are easily heated, converted for someone whose stairs skills may not be the best and may be deteriorating, or indeed- don't soak up ridiculous amounts of funds to stop them falling down.

Its not left lunacy (for most people)- its an honest attempt to try and help people migrate in later life into property more suitable to their needs- simultaneously freeing up funds to do with as they will. If this includes buying a nice apartment in a resort in Portugal where they'll live 6 months of the year- well, bully to them.

Personally I think it is cruel that many elderly people live in penury in large old houses, because they don't feel that they have any other viable alternates- and to be brutally honest- many of them do not have any other viable alternates- we need to make sure that they see that they do have alternates- and invest money, time and effort- in redesigning how people view retirement and their latter years.

Any development in our larger urban centres- has to be focused on high density housing units- with impeccable access to facilities and amenities- we do not have the luxury of building these rambling older houses with their half acre gardens any more. However- if an elderly person does not want to vacate their larger rambling property- so be it- but they have to be shown that there are very appealing alternates- none of this boot them out the door and grab the property lark- more- make damn certain there is a great alternate available to them and give them every opportunity to avail of it- if they decide not to- then so be it.

If you read my post you'll see I was referring to the idiotic post by the communist who thinks your relative should be taxed to force her to downsize.

Denny_Crane

Pkiernan wrote: »

If you read my post you'll see I was referring to the idiotic post by the communist who thinks your relative should be taxed to force her to downsize.

The hardship being created in Dublin due to a myriad of factors needs to be fixed with a myriad of solutions. There is absolutely no reason for people to think it's a good idea to potter around in a four bedroom house in their eighties. Others have even suggested that the government should support, with public funds, converting such houses.

Your solution seems to be just to leave them too it. Having looked at houses in Dublin 8 when buying a couple of years ago I was taken a back at the state of some of them. People had obviously grown old, not able to do anything to the house and ended up living in appalling conditions.

While communism doesn't work neither does a non distributive system.