Downsizing for Retirement and Buying a Home in Ireland

How downsizing can be a positive change for those who want to buy property abroad in Ireland and afford a great retirement

Those approaching retirement age are often in a position where they own their home outright or are in the last few years of paying off a now comfortably affordable mortgage, where they therefore have considerable equity accrued in their home and where they might actually be dreading the thought of managing the upkeep of a large family home once they come to retire.

According to the Council of Mortgage Lenders, Brits aged 65+ now have as much as GBP 460 billion in clear equity in their homes – and at the same time, a large percentage of this group of people have less than the ideal pot in their pension fund.  So the obvious choice for many retirees is downsizing for retirement and buying a home that is more affordable, easier to maintain and which allows for a sizeable chunk of equity capital to be used to fund retirement.  If you’re considering your downsizing options, what about buying a home in Ireland?

Property prices in Ireland have famously gone through the roof over the last decade with Dublin now one of the most expensive cities in the world when you combine the cost of living and the price of real estate!  However, prices have ceilinged, prices are stagnant in many areas of the country and they have even fallen in towns, villages and communities where the employment and commute options are fewer. 

What this means is that it is very much a buyer’s market in Ireland at the moment – and for those who are downsizing and in a position to buy a home in Ireland for cash, the advantage is with them!

Downsizing can be a very practical but also equally emotive issue.  After all, if you are going to be selling the home where you brought up your children that can mean you will be leaving behind many happy memories.  But by moving abroad to such an accessible and not too distant location where the way of life, language and people are so familiar, this can take the edge off the negative emotions and of course ensure that you are close enough at hand to visit family and old friends as often as you want.

The advantages of downsizing are clear – you can sell a home which is likely to be larger than your requirements, with perhaps a garden that is becoming more of a burden than an asset, and you can free up a certain amount of accrued equity entirely capital gains tax free if the property to be sold is your primary residence.  You can use this extra cash to fund your retirement and put a lump sum into a smaller, more manageable home.  And if you choose your overseas retirement in a location as accessible as Ireland, this will make the move that much easier to plan and arrange and it will also cost significantly less than if you decided to live abroad in retirement in Australia for example.

And finally, rather than seeing downsizing as a negative necessity to afford retirement or manage a home, see moving to live abroad and buying a property in Ireland as the start of a brand new period in your life where money worries will ebb away and where you can at last enjoy your free time in a country rich in history and culture, where the people enjoy a great standard of living and where the landscapes are stunning.