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
