Homeowners downsize for a variety of reasons. It’s more common for retirees to move into smaller properties but younger people are now downsizing for a variety of reasons. There are both advantages and disadvantages to moving into smaller living spaces. Financially, a smaller home may reduce utility costs, property taxes, homeowners insurance and your mortgage payment. Downsizing may free up time that was spent on yard work and house cleaning. As long as you meet the IRS requirements you may be able to take advantage of a tax free gain of up to $250,000. Consult a tax advisor for information and to advise you on all the IRS requirements and weigh all financial and non-financial effects before making a decision.
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