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10 tips for retirement home buyers
From service charges to inheritance tax - points to consider when choosing a home in retirement
1 First decide whether a retirement home is the right choice. If you’d rather keep the home in which your children grew up, equity release schemes offer a range of options which allow you to draw capital or raise income from your home without having to move.
2 Make sure the property is resaleable. You may in the future want to move for reasons that so far haven’t even occurred to you.
3 Location is vital, for as you grow older you will need to be in easy reach of all amenities.
4 Allow for the cost of repairs and maintenance. If you buy a leasehold flat or sheltered accommodation, take account of any ground rent and service charges. Find out whether they are fixed or will rise and, if so, by what amount.
5 Energy bills are unlikely to fall, so make sure the home you choose is well insulated.
6 Downsizing will release a lump sum which can make life more comfortable, but it’s vital to take professional advice on where best to invest it. It may not be a good idea for younger retired people to invest all their house capital into a retirement property. Begin with an independent financial adviser.
7 If the amount involved is substantial enough to leave your estate liable to inheritance tax , discuss tax options with your adviser.
8 Be aware that savings may disqualify you from claiming benefits or receiving a council tax reduction – and might result in a liability for care-home fees should you or your partner need long-term care in the future.
9 Be aware that many purpose-built retirement properties will levy weekly service charges. McCarthy & Stone charge between £30 and £40 a week.
10 Saga’s long-term care advice line number is 0800 056 8152. Ring to obtain a free copy of the guide to funding long-term care Making Sense of Care in Later Life, or download a PDF version here
This article was created: 11 October 2006.
This article was last edited: 18 October 2006.
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