Rightsizing: How to trade your ‘too-big’ house for a low-maintenance home

Would you sell your too-big home in return for a lifelong tenancy in a smaller one that was easier to manage? Then “private rightsizing” might be for you.

Older people in some local-authority areas who own homes they find too big for their needs can request their council buy them out in return for a spot in an age-friendly housing scheme. One scheme is open to applicants as young as 55.

Originally and more commonly known as “downsizing”, the idea has been rebranded in the Government’s Housing for All strategy as “private rightsizing”.

Indeed, a national policy on rightsizing is currently in the works, according to Minister for Housing Darragh O’Brien. It’s part of an overall Housing for All commitment to increase housing options as we age so that more of us can live independently in our communities for longer.

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Officials are keen to stress that rightsizing is voluntary, after pushback on the policy. Age Action’s Celine Clarke had said rightsizing shouldn’t be “a crude exercise to shake out some kind of housing stock”.

“An awful lot of older people will say to us, when we talk about rightsizing policy or housing options, that they don’t want to be downsized or rightsized,” she says.

“Any sort of talk about a rightsizing policy is wrong if it starts with the idea that we’re trying to get homes for other people.”

Some 25 per cent of older adults find their homes difficult to maintain, and 10 per cent are unable to keep their home adequately warm

Ireland doesn’t have the plethora of dedicated private retirement housing common elsewhere. In the United States, for example, retirement housing is a sophisticated real-estate market where the offering has evolved well beyond adapted bathrooms.

One of the largest private developments, the Villages in Florida, has 125,000 senior residents, 100 restaurants and 42 golf courses. It even introduced a fleet of self-driving taxis that residents summon using an app.

On this side of the water, the options for older people are less defined. Currently, 85 per cent of people over the age of 65 own their homes. A 2016 survey by the State-run Housing Agency found two-thirds of us want to live in our own homes for as long as possible.

[ We would like to downsize but are afraid we won’t be able to find a new home. What should we do? ]

Some 25 per cent of older adults, however, find their homes difficult to maintain, and 10 per cent are unable to keep their home adequately warm. This is according to 2020 research from Age Friendly Ireland, a programme involving national and local Government in age-related planning and service provision. There are 234,000 homes with two bedrooms not in use, according to the research.

Some 15 per cent of the survey’s participants expressed a desire to move to a different property in their own community. The trouble is there is a dearth of suitable rightsize properties for sale.

Retrofitting will make your older house warmer, but unless you qualify for a State-funded free energy upgrade, as fuel allowance recipients do, you could spend up to €60,000 on insulating space you’re not really using. There are home adaptation grants too.

Renting out a spare bedroom to earn up €14,000 tax-free could help with energy bills but once the kids have finally moved out, who wants to go back to a house-share?

There aren’t enough dedicated residential communities for older people to meet demand. McAuley Place in Naas and Sue Ryder House in Dalkey are examples of approved housing bodies – these are not-for-profit organisations that receive State funding to provide affordable housing. Both have options for people in private housing to move there and make a financial contribution. They have very long waiting lists, however.

In the absence of appealing or available alternatives, many older people who would like to move can end up putting up and staying put. In this context, selling to the council and moving to a smaller home in your area may have its appeal.

From a planning perspective, a quarter of all new apartments, in schemes of 10 or more, must be universally designed, meaning they are bigger and suitable for older people and those with impaired mobility

Cork City Council is already out of the traps on private rightsizing. It gives the owners of suitable private homes the option to sell to them in return for a lifelong tenancy in a more age-friendly abode.

Arus Mhuire in Blackrock on the city’s southside is an example. Designed by O’Mahony Pike architects, the development comprises 30 one- and two-bedroom homes with an on-site caretaker. It’s owned by the council and managed by approved housing body Tuath.

Residents include council tenants who have opted to transfer from bigger council properties, as well as a smaller number of private homeowners who have chosen to sell to the council and move. The lessons learned from schemes like this will inform national policy on rightsizing.

Dún Laoghaire-Rathdown, which has the highest median house price in the country at €630,000, provides rightsizing options for council tenants only. These include 16 “universally designed” homes in Leopardstown, and others are being built at Shanganagh and next to St Laurence’s Park in Stillorgan. There is currently no scheme in place for private homeowners to sell too-big properties and rightsize to an age-friendly council-owned scheme in their area should they want to. But private rightsizing is being considered by that council’s strategic policy committee, says a spokesperson. So watch this space.

Dublin City Council offers private rightsizing to those aged 60 and over. The council and approved housing bodies currently have new older people’s housing developments in the pipeline at 11 sites, with the delivery of 430 units planned for 2027, it says.

From a planning perspective, a quarter of all new apartments, in schemes of 10 or more, must be universally designed, meaning they are bigger and suitable for older people and those with impaired mobility.

Earlier this month Limerick City and County Council opened its fourth private rightsizing scheme. Those participating will sell their homes to the council in return for tenancy in a brand new one- or two-bed apartment in the Newtown Meadows development in Castletroy.

The council says it has an informal register of interest of more than 100 private households inquiring about rightsizing options. “We are confident that there is significant latent demand for private rightsizing schemes,” says Caroline Curley, director of housing with Limerick City and County Council.

“Our aim is not just to help people wanting to transfer to a smaller home, but to release larger three- or four-bedroom properties that are in high demand for families that need them most,” she says.

It’s vitally important that those interested in private rightsizing engage a solicitor to protect their interests before filling out an application form

The rules around private rightsizing vary by council. The new Limerick scheme is open to applicants aged over 55 who are living alone in a house too large for their needs and who are capable of living independently.

In order to qualify, your house must be located in the council area operating the scheme. So if you have a big house in Dublin and want to cash out and retire to your native Limerick, that’s not going to be a runner.

The relevant local council will inspect your property. If it needs substantial repairs, the council may not be interested in buying it.

If the council is interested, it will arrange an independent valuation.

If the house you want to leave is particularly valuable, it’s a matter of “seller beware”. The council says it won’t purchase a house with a value in excess of a price limit set by the Department of Housing. It may, however, consider purchasing your property at a discount.

Yes, you will receive a tenancy in a rightsized home in return, but you will have received less money for your home than it would achieve on the open market.

That’s one of the reasons why it’s vitally important that those interested in private rightsizing engage a solicitor to protect their interests before filling out an application form. Limerick City and County Council advises this too.

Private rightsizers also pay a financial contribution to the council for a tenancy in an age-friendly scheme.

In the case of the new Limerick scheme, private rightsizers must pay 25 per cent of the net proceeds of the sale of their home. For example, if your property is valued at €250,000, legal fees were €5,000 and there is no outstanding mortgage to clear, your financial contribution to the council for the tenancy is €61,250. The homeowner retains €183,750, which is the balance of the money from sale.

Whether you are aged 55 and have an average of 30 years’ life expectancy remaining or you are over 80, it’s one flat band of contribution. Younger rightsizers are arguably more likely to get their money’s worth from the transaction.

In Cork, private rightsizing is open to those aged 60 and over. Priority is given to those in unfit accommodation, those not able to meet the cost of maintaining their home and those who are financially unable to find suitable alternative accommodation. Residents must sign a tenancy agreement, pay a financial contribution to the council and also pay a weekly rent.

You need to be personally satisfied that a lifelong tenancy in age-friendly housing is compensation enough for the possibly lower-than-market-value price the council will pay for your home

The financial contribution payable by the applicant is calculated on a sliding scale. Those aged 60-69 make a financial contribution of one-third of net proceeds of sale of dwelling, those aged 70-79 years pay a quarter and those aged 80 years and over pay just one-fifth of the net proceeds of sale of dwelling.

If Dublin City Council agrees to buy your home in return for rightsized accommodation, it will be at a discount based on your age. Those aged 60-69 will receive 60 per cent of their home’s market value. Those aged 70 and older will receive 70 per cent. The Pembroke area of Dublin city has the highest median or midpoint house price in the country at €800,000, according to CSO figures.

If you are interested in private rightsizing, get good legal advice. You need to be personally satisfied that a lifelong tenancy in age-friendly housing is compensation enough for the possibly lower-than-market-value price the council will pay for your home and the financial contribution you must make to live in your new home.

If the home you are selling was your principal private residence until the time you sold it, you won’t pay capital gains tax, according to Marian Ryan of Taxback.com. Be mindful of gifting the sale’s proceeds to children, for example, if you think you may wish to avail of the Fair Deal scheme in future.

Of course you should satisfy yourself that the new accommodation is better in the ways that are now important to you – in terms of heat, cost and accessibility – than the house you are leaving. Is the property still close enough to family and friends? Check the amenities in the new location too, such as shops, transport and entertainment. Do you need a garden for your dog or a parking space for your car?

By 2051, there will be 1.6 million people over the age of 65 in Ireland. The first-time buyers of today, whose average age is 34, will be turning 62. Those desperate now to buy a three- or four-bed home may one day be the empty-nesters looking for something more manageable. Let’s hope that Government policy catches up.