When considering downsizing, it is crucial to ensure that your decision aligns with your future goals and aspirations. At Phillips Wealth Partners, we are here to help you make the most of this transition and seize the opportunities it presents.
Our team of downsizing specialists is dedicated to providing you with expert advice and guidance throughout the entire process. We understand that downsizing involves various considerations, and we are committed to helping you gain clarity on the following key aspects:
Implications of Selling and Buying Properties: We will carefully assess the financial and practical implications of selling your current property and purchasing a new one. Our experts will guide you through the entire transaction, ensuring that you make well-informed decisions that align with your long-term goals.
Impact on Age Pension Payments: Downsizing can potentially impact your age pension payments. Our specialists will help you understand the intricacies of this aspect and provide insights into how your decision may affect your pension benefits. We'll work with you to maximize your financial situation while ensuring your pension payments are optimized.
Downsizing Scheme Eligibility: We will evaluate whether you are eligible for any downsizing schemes or initiatives offered by the government. These programs can provide additional benefits and incentives that may further enhance the advantages of downsizing.
Alternative Investment Opportunities: Our experts will explore whether the funds from downsizing to a more affordable home could be better allocated to alternative investments. We will assess various investment options to help you make informed choices that align with your financial objectives and maximize the potential returns on your funds.
At Phillips Wealth Partners, we believe that downsizing should be a positive and empowering experience. Our goal is to support you in making confident decisions that will enable you to achieve your next steps and life goals.
Granny Flat Arrangements: A Popular Downsizing Option: An increasingly popular choice for downsizing is to enter into a Granny Flat Arrangement. This arrangement can involve living in a multi-generational household where an older person resides with a family member or in separate accommodation on the same property. It offers a unique and fulfilling living situation that brings satisfaction and numerous benefits to all parties involved.
What is a ‘granny flat arrangement’?
Commonly, a ‘granny flat arrangement’ is a situation where an older person lives with (or in separate accommodation on the same land as a family member and does so with payment of monies or a transfer of assets in return for the right to live in accommodation, usually for the rest of their life.
Also referred to as ‘granny flat right’, this arrangement can be structured in a number of different ways. The fundamental concept is some property is transferred, or some monies are paid, in return for the right to reside for the balance of their life.
Granny Flat Planning
Prior to the passage of legislation in June 2021, many families were hesitant to formalize financial transactions involved in a granny flat arrangement due to potential immediate capital gains tax implications for the recipient of the funds. This reluctance often left the older person in a vulnerable position in case the arrangement didn't work out as expected.
At Phillips Wealth Partners, we understand the importance of safeguarding all parties involved in a granny flat right. We offer comprehensive planning services to ensure that your decision is well-informed and protects the interests of everyone involved. Our services include:
Tax Considerations: We will carefully review the tax implications associated with the granny flat arrangement, ensuring that you are aware of any potential tax obligations or benefits.
Estate Planning: Our experts will assess the impact of the granny flat right on your overall estate plan. We'll help you understand how this arrangement may affect your assets and inheritance plans, ensuring that your estate is structured appropriately.
Centrelink Benefits: Specifically, we will evaluate how the granny flat arrangement may impact your eligibility for age pension and home care packages provided by Centrelink. Our goal is to help you make informed decisions that minimize any potential impact on your government benefits.
Exit Strategy Preparation: It's crucial to plan for unforeseen circumstances. We will work with you to develop an exit strategy for the granny flat arrangement, providing you with peace of mind and a clear roadmap in case the arrangement needs to be modified or terminated in the future.