Pros and cons of home reversion

Pros and cons of home reversion


Super (AU): Pros and cons of home reversion

Home reversion is when you sell a share of the future value of your home whilst still living there. You receive a lump-sum payment and continue to own the remaining share of your home equity.

Pros

  • You are able to continue living in your home after you sell the share
  • You can conduct renovations or maintenance that your home may need with the lump-sum payment you receive
  • You can use the lump sum for any urgent needs such as medical treatments
  • The lump-sum could help you secure accommodation till your home sells

Cons

  • You will own the lower share of the equity in your home
  • Transactions and costs can get complicated and it may be hard to navigate that
  • Your eligibility for Age Pension might also be influenced
  • Your ability to afford aged care could be affected
  • You might end up eating into money that you need for the future – such as for medicare
  • You might be locked into fewer options if your circumstances change
  • If you are the sole owner and someone else lives with you, they may no longer be able to live in the house if you move out or pass away
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If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.


Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.


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