Helping a parent downsize or refinance in WA

Helping a parent with their home in retirement usually comes down to 1 question first: do they want to move? If they do, downsizing can free up equity, and from age 55 each of them may be able to put up to $300,000 of the sale proceeds into super. If they want to stay, the options are a standard refinance, a reverse mortgage or the government’s Home Equity Access Scheme, and each costs something different over time.

This guide compares those options with the rules that apply in WA in 2026, so you can have the conversation with real numbers. It is general information. Your parent’s own adviser, and the free Financial Information Service run by Services Australia, can look at their situation.

Downsizing, refinancing and equity release compared

Option	Does your parent move?	Repayments	Key rule
Downsize	Yes	None if the new home is bought outright	Downsizer contribution to super of up to $300,000 each, from age 55
Refinance a standard home loan	No	Yes, regular repayments	The lender must work out how retirement changes their income
Reverse mortgage	No	None while they live there	From age 60, likely 15 to 20% of the home’s value at 60
Home Equity Access Scheme	No	None required	Age Pension age or older, 3.95% a year compounding fortnightly
Family help, such as a guarantee	Depends	Depends on the arrangement	Puts the family member’s own assets at risk

Sources: ATO, ASIC RG 209, Moneysmart, Services Australia.

Start with what your parent wants

The right option for downsizing in retirement follows your parent’s goal, not the other way round. Before looking at loans, agree on 3 things. Does your parent want to stay in the family home? How much money do they need, and for what? Is aged care likely in the next few years?

Moneysmart lists the questions to weigh before releasing equity from a home, including:

• how it affects their eligibility for the Age Pension;
• whether they can still afford aged care later;
• whether someone who lives with them can stay in the home when they move out or die.

The free Financial Information Service from Services Australia can explain how each option affects their pension. It is a sensible first call before any lender or broker.

Pros and cons of downsizing in retirement

Downsizing in retirement does not suit everyone, and Moneysmart’s list of 4 pros and 4 cons is a good way to start the conversation.

Pros	Cons
More cash flow to pay off debt, invest or spend	Less space, so some belongings have to go
Easier to maintain	Less room for guests or entertaining
A home that better fits their needs or location	A new area can take time to adjust to
Lower household costs	Leaving the family home can feel difficult

Think ahead as well. Bendigo Bank suggests asking what access or mobility needs your parent will have in their next home. If they would rather stay put, Moneysmart lists alternatives such as renting out a room or converting the home for dual occupancy.

Downsizing: costs, super and the pension

Downsizing means selling the family home and moving to a smaller home, often a unit, townhouse or retirement village home. It comes with 4 main costs, according to Moneysmart: real estate agent fees, stamp duty, legal fees and moving costs, plus strata or body corporate fees on many units. All of them come out of the equity your parent is trying to free up.

How much money downsizing frees up depends on the property market. Moneysmart notes that if your parent buys and sells in the same market, the price difference may be small.

WA stamp duty on an off-the-plan home

For a parent downsizing in retirement to a new apartment or townhouse, WA’s off-the-plan duty concession can cut the stamp duty on the purchase. The concession runs until 30 June 2028. For a pre-construction purchase of $800,000 or less, the concession is 100% of the duty, capped at $50,000, and it phases down to 50% above $900,000 (WA Government). The WA Government says a buyer of an $800,000 pre-construction home saves more than $32,300, and it pitched the change at seniors looking to downsize. Homes bought while under construction get a 75% concession up to $800,000. The stamp duty concession glossary entry explains how concessions work.

The downsizer contribution to super

The downsizer contribution is the main super rule for downsizing in retirement. Your parent may be able to put up to $300,000 from the sale into super, or $600,000 for a couple, according to the ATO. The main conditions:

• they are 55 or older when they make the contribution;
• they or their spouse owned the home for 10 or more years before the sale;
• the sale qualifies, fully or partly, for the main residence capital gains tax exemption;
• they give their fund the downsizer form before or when they contribute, and contribute within 90 days of receiving the proceeds.

A downsizer contribution does not count towards the contribution caps. The ATO says it can still affect the Age Pension, so check that first.

The Age Pension after a home sale

Downsizing in retirement can change your parent’s Age Pension. While your parent lives in their home, the Age Pension assets test does not count it, but cash from selling it can count. For a home sold from 1 January 2023, some of the proceeds are exempt from the assets test: the part your parent plans to spend on a new home. The exemption lasts up to 24 months, or up to 36 months in some cases (Services Australia). That money is deemed at the lower deeming rate only. Anything left over is assessed normally.

Moving into a WA retirement village

A retirement village is a common choice when downsizing in retirement, but it works differently from buying a unit. The exit costs deserve the closest look. Consumer Protection WA says leaving fees can include a deferred management fee, refurbishment costs, reserve fund contributions, marketing and selling fees and ongoing charges (Consumer Protection WA).

WA’s Retirement Villages Regulations 2026 started on 1 September 2026. An operator now has up to 12 months after your parent permanently moves out to pay their exit entitlement (Consumer Protection WA). Your parent must also get a disclosure statement at least 10 working days before signing a residence contract. Read it with them, and get legal advice before they sign.

Refinancing a home loan in retirement

Refinancing suits a parent who wants to stay put rather than downsizing in retirement. A standard refinance is still possible for an older borrower, but the lender looks harder at how the loan will be repaid. ASIC’s responsible lending guide covers borrowers who will still be making repayments after their expected retirement age. The lender needs to work out whether retirement will change their income, and by how much (ASIC RG 209.64).

In practice, your parent should expect questions about their super, pension and any plan to sell the home, because those are what repay the loan after their pay stops. A smaller loan means smaller repayments to pass the serviceability test. If the goal is a lower rate on an existing loan, our guide on whether refinancing is worth it covers the costs to check.

Reverse mortgages: how much and at what cost

A reverse mortgage is a commercial alternative to downsizing in retirement. It lets your parent borrow against the equity in their home without making repayments while they live there. Moneysmart says it is an option from age 60 (Moneysmart):

• At age 60, the most your parent can borrow is likely to be 15 to 20% of the home’s value. As a guide, add 1% for each year over 60.
• Interest compounds, so the debt grows over time, and the rate is likely to be higher than on a standard home loan.
• The loan is repaid in full when the home is sold, when they move out, or when their estate sells it.
• Reverse mortgages taken out from 18 September 2012 have negative equity protection, so your parent cannot owe more than the home is worth.

The lender or broker must go through reverse mortgage projections with your parent, showing the effect on their equity over time. Ask for a printed copy and go through it together. Moneysmart also notes that part of the equity can be protected, for example to leave money for aged care.

The Home Equity Access Scheme

Services Australia’s Home Equity Access Scheme is a government alternative to downsizing in retirement: a loan for people of Age Pension age or older, secured against Australian real estate (Services Australia). Your parent can take it as a fortnightly amount, a lump sum advance or both.

The main rules, from Services Australia:

• The interest rate is 3.95% a year, compounding each fortnight on the loan balance until it is repaid.
• Their combined pension and loan payment each fortnight cannot be more than 150% of the maximum pension rate. A self-funded retiree who gets no pension can take up to the full 150%.
• A no negative equity guarantee applies.
• They must hold adequate insurance on the property, and Services Australia suggests independent legal or financial advice before applying.

At 3.95%, the Home Equity Access Scheme rate is below the 6.24% the RBA reported as the average for new owner-occupier home loans in July 2026. Moneysmart says reverse mortgage rates are likely to be higher than standard home loan rates. The trade-off is that the amount available each fortnight is capped.

Where the family fits in

When a parent is weighing up downsizing in retirement, an adult child can help most by keeping the decision about their goal, not the product. 4 useful roles:

• Sit in on meetings with the lender, broker or adviser, with your parent’s agreement.
• Get the costs of each option in writing, including the reverse mortgage projections.
• Make sure your parent gets independent legal advice before signing, separate from any family member who benefits.
• If you are asked to guarantee a loan, read our guide on being a guarantor first. A guarantor loan puts your own assets at risk.

If your parent is buying the next home before selling the current one, bridging finance can cover the gap.

How a broker fits in

434 businesses are listed in our mortgage broker directory, and 320 in our refinancing directory. A broker can compare refinance and reverse mortgage lenders and run the projections the law requires. Questions about super contributions and the Age Pension are outside a loan broker’s role, so take those to a licensed financial adviser or the Financial Information Service. Check the broker’s credit licence before your parent shares documents.

Checked against ATO, Services Australia, Moneysmart, ASIC, WA Government and Consumer Protection WA sources on 26 September 2026. This is general information, not financial, legal or tax advice. It does not consider your parent’s objectives, financial situation or needs.

Frequently asked questions

How much can my parent add to super?

After downsizing in retirement, your parent can make a downsizer contribution of up to $300,000 from the sale of their home, from age 55. Their partner can too, so up to $600,000 for a couple. The home must have been owned for 10 or more years, and the money must go in within 90 days of receiving the proceeds. The contribution does not count towards the contribution caps.

Does selling the home affect the Age Pension?

Selling can affect the Age Pension because the assets test does not count the home your parent lives in, but it can count cash. For homes sold from 1 January 2023, the proceeds your parent plans to spend on a new home are exempt for up to 24 months, or 36 months in some cases.

What is the Home Equity Access Scheme interest rate?

The Home Equity Access Scheme charges 3.95% a year, compounding each fortnight on the loan balance, according to Services Australia. It is available to people of Age Pension age or older and carries a no negative equity guarantee.

How much can you borrow with a reverse mortgage?

At age 60, a reverse mortgage is likely to allow borrowing of 15 to 20% of the home’s value, according to Moneysmart. As a guide, add 1% for each year over 60, so at 65 the most is about 20 to 25%.

Can a retiree refinance a home loan?

Yes, refinancing is an alternative to downsizing in retirement if the lender is satisfied your parent can make the repayments. Under ASIC’s responsible lending guide (RG 209), the lender must work out how retirement changes their income if repayments continue past retirement age.

Is there stamp duty relief for downsizers in WA?

The WA Government points downsizers to its off-the-plan duty concession, which runs until 30 June 2028. A pre-construction purchase of $800,000 or less gets a concession of 100% of the duty, capped at $50,000.