Downsizing and retirement
Downsizing: is a smaller home the right move?
Understand what a move would release, and what it would cost, before deciding.
The short answer
Downsizing releases the difference between what your current home sells for and what the next one costs, less the costs of moving — agency and legal fees, the Home Report, LBTT on the purchase and removals. In much of Edinburgh, well-located smaller flats hold their value strongly, so the released sum is often smaller than owners expect. Work out the net figure before committing.
What this means
The financial case for downsizing rests on the gap between two prices, not on the headline value of the current home. In areas where flats are in short supply, that gap can be narrower than the size difference suggests.
Running costs matter as much as capital. Heating, factoring, council tax band and maintenance on a large period property often make the strongest argument for moving.
Sequencing is the practical question: whether to sell first and rent, or to buy first. In Scotland's system, having your own sale agreed usually makes your offer far more attractive.
Your possible options
These are possibilities to consider, not recommendations. Which of them fits depends on your own circumstances.
Sell first, then buy
You know your budget exactly and your offer is stronger, at the cost of a possible gap in between.
Buy first, then sell
Avoids moving twice, but usually needs bridging or savings and carries risk if the sale takes longer.
Specialist advice: Bridging finance is regulated lending — take advice.
Stay and adapt the property
Reconfiguring, closing off unused rooms or improving heating sometimes solves the actual problem.
Move to a different area rather than a smaller home
The same size of property can cost considerably less a few miles out, with better transport than people assume.
Explore later-life options
Retirement housing and equity release exist, but both need careful independent advice.
Specialist advice: Equity release is regulated advice — speak to an authorised adviser.
What should I do first?
- Establish what the current home would realistically sell for.
- Price the kind of property you would actually move to.
- Add up the costs of moving, including LBTT on the purchase.
- Calculate the honest net figure released.
- Compare that against the annual running-cost saving.
- Decide whether to sell first or buy first.
- Arrange the Home Report when you are ready to market.
You may need specialist advice
Lothian Property publishes property information. It is not a law firm, lender, financial adviser or estate agent, and the professionals below are independent of us.
- Conveyancing solicitor
- In Scotland a solicitor normally handles missives, title and settlement, and often the marketing too.
- Estate agent or selling solicitor
- Marketing and selling the property is carried out by the agent or solicitor you appoint, not by Lothian Property.
- Mortgage adviser
- Borrowing, porting and affordability are regulated advice. An FCA-authorised adviser can review your options.
- Tax adviser or accountant
- Capital gains, inheritance tax and Additional Dwelling Supplement depend on your own circumstances.
What to do next
Understand your property position first
Tell us about the property and what has changed. We will set out what the information says, with no obligation to sell and no pressure to decide anything today.
Common questions
- Should I sell before I find my next home?
- In Scotland an agreed sale makes your offer considerably stronger, and closing dates move quickly. Selling first is common, though it may mean a short rental.
- How much does downsizing cost?
- Typically the Home Report, marketing and legal fees on the sale, legal fees and LBTT on the purchase, plus removals. The purchase tax is usually the largest single item.
- Does downsizing affect my tax position?
- LBTT is payable on the property you buy, not the one you sell, and there may be other considerations depending on your circumstances. A tax adviser can confirm your position.
Sources
- Revenue Scotland — LBTT — government
- Scottish Government — buying and selling a home — government
Related situations and guides
About Lothian Property
An independent starting point, not an estate agency
Lothian Property is an independent property information and introduction service. We are not an estate agency. We help homeowners understand their property, their options and their local market, and — where appropriate and only with your permission — introduce them to independent estate agents and other property professionals who can assist.
How Lothian Property worksPrepared by Lothian Property. Information last reviewed 2026-08-18; next review due 2027-08-18. General property information for Scotland, not legal, tax or financial advice. Editorial policy.