Downsizing Your Home

Selling your home:

The value of each property is unique. But you can get a rough idea of what your home is worth by checking what houses in your local area sold for. This can be done by looking up the Property Piece Register ( propertypriceregister.ie )

A house can be sold by ‘private treaty’ or by ‘auction’. Which method is best will depend on your particular circumstances. You will need to ensure that matters such as furniture, fittings and carpets are clearly covered in the sale agreement, in order to avoid any disputes in future.

If there are any debts attaching to the property such as mortgage, Property tax and utility bills these need to be dealt with. Your solicitor will advise you on these.

Houses built after October 1964 will need an architect’s certificate stating that planning permission regulations have been complied with.

If you are selling your family home you will need the consent of your spouse if there name is not on the title deeds.

Buying and selling a property at the same time can be difficult. A good solicitor will be able to guide you through this process. You will be advised on whether you need bridging finance or not.

When you have decided on your new home it a good idea to get an engineer’s report before you finally commit yourself to purchasing the property. A good estate agent will advise you on this.

Costs that need to be taken into account are Stamp Duty, the Auctioneers fees, Solicitors fees and moving cost. If you are selling your main residence you will not be liable for Capital Gains Tax. Stamp Duty is paid at 1% on the first €1,000,000 and 2% the balance. Stamp Duty is not paid on the VAT part of the house price (VAT is only paid on new builds).

When you actually move there are a number items of ‘housekeeping’ that need to be looked after. These items include: Redirecting post, Transferring utilities and TV license etc. home, life and motor insurance. Have your details updated on the Electoral register. You will need to notify Revenue and any financial intuition you have dealings with.

 

How will the released equity effect your social welfare entitlements?

Contributory State Pension

This not a means tested payment, any change in your financial situation will not have an effect on your basic payment. If you receive an increase for a dependent this may be affected by your change in circumstances.

Non-Contributory State Pension

This is a means tested payment, any change in your financial situation may have an effect on your payments.

Household Benefits Package (Electricity/Gas allowance & free TV license).

This is not normally a means tested payment so it will not be effected. If you are between 66 and 70 and not receiving a qualifying payment your entitlement may be effected.

However if you move in with a child or other person that is not a fulltime career for you, your entitlement may be effected.

Medical Cards this is a means tested entitlement and as such a change in your financial situation may affect your eligibility.

There are different rules for assessing eligibility for medical cards depending on weather you are over or under 70

 

Assessing Capital as Means for Social Welfare payments.

To find your means from capital, first you must calculate your total capital value. You do this by adding together all your sources of capital (for example, property, savings and investments). Then you apply the relevant formula below.

The formula for assessing means from capital for all social welfare payments (except Disability Allowance and Supplementary Welfare Allowance) is as follows:

Capital Weekly means assessed
First €20,000 Nil
Next €10,000 €1 per €1,000
Next €10,000 €2 per €1,000
Balance €4 per €1,000

When applying for Disability allowance or Supplementary Welfare Allowance a different formula from above is used.

Income from property personally used (your home)

The value of the house you live in is not taken into account in the means test. However, any income you are getting from it is taken into account. For example, if you rented a room in your house, that income is assessed. There is an exception to this, if not renting the room means that you would be living alone then your income from rent is not taken into account.

Selling your home

If you sell your home, the proceeds of the sale would normally be taken into account as means. If you are living in accommodation which no longer suits you or which you are no longer able to maintain, you may be able to sell your home and move to more suitable accommodation and have up to €190,500 of the proceeds of the sale excluded from the means test. This exemption of €190,500 applies if you sell your house in order to:

  • Buy or rent more suitable alternative accommodation
  • Move into a private nursing home which is registered under the Health (Nursing Homes) Act 1990
  • Move in with a person who is getting a carer’s payment to care for you
  • Move to sheltered or special housing in the voluntary, co-operative, statutory or private sectors

Usually the first €190,500 of the sale proceeds is not taken into account. However, if you use the proceeds of the sale to buy more suitable accommodation, the balance of the proceeds after buying the new accommodation is exempt up to a limit of €190,500.

However the proceeds of the sale may be taken into account by the Health Service Executive (HSE) when your entitlement to the Fair Deal Scheme for nursing home care is being assessed.

Investment income from the sale of your home

Any benefit you get from investing the sale proceeds is assessable as means. Interest which is kept as capital is assessable in the same way as capital is normally assessed. However, the Department of Social Protection states in its Operational Guidelines on Means Assessment that an allowance should be made where a person has significant maintenance expenses, such as nursing home costs, which are met out of interest payments. In such cases, only the interest on the exempted capital (up to a maximum of €190,500) may be disregarded as means.

Leaving your home but not selling. If, due to old age or incapacity, you leave your home either on a temporary basis or indefinitely, the value of your home will not be assessed as means. However, if it is put to profitable use (for example, rented out), the capital value of the house will then be assessed as means.

(Information: as of 22/02/2016)

To find out how this will apply to your particular situation please check with your local Citizens Information Centre or look at their website citizensinformation.ie