Help With Next Step When House Is Too Big Washington Times (12/01/00) Vol. 104, No. 47 p.F3; Carr, M. Anthony
Many homeowners approaching retirement may find that
they are ready to give up the maintenance, higher utility bills,
and extra space common to a large single-family residence. A
move to smaller quarters could be difficult, though, due to the
sentimental attachment and the complicated logistics associated
with making such a change late in life. Those owners who have
already retired should understand that living in an older home
can begin to eat into their fixed income as the property
continues to age and requires more and more repairs. The house
will need to be sold in time, and the sooner the better. Low
maintenance and affordability are better options for many than
living in a home that is too large. The AARP has produced a list
of questions that seniors should consider before planning a move
to scaled-down living. Retirees relocating to a new residence
should consider the style of living they would prefer. This
includes the state of maintenance, level of comfort, and
amenities. They might also consider location, in terms of
neighborhoods and proximity to the grocery store, doctor's
office, and relatives. Retirees planning to move to a new
residence should also consider safety criteria, including the
presence of smoke detectors, fire extinguishers, and secure
doors. If retirees are considering moving in with their
children, they should factor the possible changes in family
dynamics. One potential issue is whether or not the home is
suitable for an older adult to reside. Retirees might also
consider the $500,000 exclusion available to married homeowners.
Or $250,000 for singles, when selling a principal residence.
Should a spouse pass away in the same year as the home is sold,
the living mate is still entitled to the $500,000 exclusion.
After that year, the widow or widower can only claim the $250,000
tax shelter and must pay capitals gains on the remaining amount
of the transaction.