After the children leave home or as retirement approaches, more and more homeowners are choosing to sell their house and move into a smaller apartment that is easier to manage and often better located.
This trend, known as downsizing, is driven by practical considerations: less maintenance, lower running costs and easier access to shops, public transport and everyday services.
However, making a successful transition requires careful planning, particularly when it comes to calculating the financial implications, understanding the applicable tax rules and coordinating the sale of your current home with the purchase of your new property.
This article explains the key considerations, precautions and steps involved in successfully downsizing from a house to an apartment.
In summary
- Downsizing generally involves selling a house that has become too large after the children have left home or as retirement approaches and moving into a smaller apartment.
- The transaction can often release available capital, calculated as the difference between the proceeds from selling the house and the total cost of purchasing the apartment, after expenses.
- Capital gains tax does not apply when the property sold is your main residence, but it should be considered when selling a second home or rental property.
- The costs associated with both transactions—including estate agent fees, notary fees, surveys and moving expenses—should be included in your budget from the outset.
- Choosing the right timing between selling and buying, with or without a bridging loan, is essential to ensuring a smooth transition.
- Moving into an apartment introduces new considerations, including co-ownership charges, lifts and accessibility, which should all be carefully checked before purchasing.
Downsizing: A Long-Term Property Market Trend
A Trend Driven by Different Stages of Life
Downsizing means deliberately choosing a smaller home that better suits your current lifestyle.
It most commonly concerns homeowners whose children have left home. A family house originally designed for several people can gradually become unnecessarily large once the children move out.
This is sometimes referred to as “empty nest syndrome” and naturally leads many homeowners to question whether keeping a large property still makes sense for their everyday needs.
Retirement is another common trigger.
Moving to a fixed income can encourage homeowners to reassess their housing budget, while a smaller apartment can often significantly reduce long-term expenses associated with heating, garden maintenance or major repairs such as roofing.
As a general rule, a smaller and better-insulated property will usually generate lower day-to-day running costs than a detached house.
Less Maintenance and Easier Access to Everyday Amenities
Beyond the financial considerations, downsizing is often motivated by a desire for a simpler lifestyle.
A house with a garden requires regular maintenance, which can become more difficult with age or simply take up more time than homeowners want to spend on it.
An apartment—particularly within a co-owned building—can reduce this burden. There is no lawn to mow or exterior façade to maintain individually, and part of the building maintenance is shared between the co-owners.
Downsizing also often involves moving closer to a town or city centre or to a neighbourhood with good transport connections.
Local shops, public transport and healthcare services within walking distance can become increasingly important over time.
This helps explain why many homeowners living in suburban or rural houses decide to sell and move into a smaller property in a more central urban location.
Calculating the Financial Impact of Downsizing
The Basic Calculation
The basic financial calculation is relatively straightforward:
Net proceeds from selling the house − total cost of purchasing the apartment = available capital
The purchase cost of the apartment should include notary fees and any applicable estate agent fees.
When market conditions are favourable and the house being sold has a relatively high value, downsizing can release a significant amount of capital that can then be invested, saved or used to finance another project.
For example, a homeowner who sells their house for €380,000 and purchases an apartment for €250,000 including acquisition costs would theoretically release approximately €130,000, before taking into account the additional expenses discussed later in this article.
This potential to release capital is one of the reasons downsizing can be particularly attractive when preparing for retirement or financing a new project.
Get an Accurate Valuation Before Making Plans
Before carrying out any reliable financial calculations, it is essential to know what your house is actually worth on the current market.
An overly optimistic valuation can distort your entire budget and potentially lead you to consider apartments that are ultimately beyond your financial reach.
A good starting point is an online property valuation, which can provide a quick initial indication of your home's value before refining the estimate with a local real estate professional.
Key Points to Consider Before Downsizing
Factor in the Costs of Both Transactions
Downsizing involves managing two property transactions at the same time: selling your house and buying an apartment.
Each transaction comes with its own costs, which should be included in your overall calculation from the outset. Otherwise, the amount of capital you expect to release could decrease much more quickly than anticipated.
When selling, you should budget for mandatory property surveys, any work required to prepare the property for sale and estate agent fees.
When buying, notary fees—generally around 7% to 8% for an existing property in France—represent a significant part of the budget.
You should also factor in moving costs, which are often underestimated, as well as any work required to bring the new apartment up to standard.
Taking all these expenses into account from the beginning will give you a much more accurate picture of the amount of capital you will actually have available after both transactions are complete.
Capital Gains Tax
If the property you are selling is your main residence at the time of the sale, any capital gain is exempt from tax, regardless of the amount.
This is the most common situation in a traditional downsizing project, as the house being sold is generally the owner's main home.
However, if you are selling a second home, a rental property or a house that you moved out of some time ago and that is no longer your main residence, the capital gain may be taxable under the rules set out in the French General Tax Code.
Progressive allowances apply depending on how long you have owned the property, with a full exemption after 30 years of ownership.
If your downsizing project also involves selling a second property, it is therefore important to consider the specific tax implications separately.
Choosing the Right Timing Between Selling and Buying
Timing is often one of the most challenging aspects of downsizing.
Selling your house too early before finding an apartment may mean having to arrange temporary accommodation.
On the other hand, buying the apartment before your house has been sold may leave you temporarily responsible for two mortgages or two sets of housing costs.
Planning the sequence of the two transactions in advance is therefore essential. The two main solutions—deferred occupancy and a bridging loan—are explained later in this article.
Practical Considerations When Changing Your Lifestyle
Co-Ownership Charges: A New Budget to Understand
Moving from a detached house to an apartment in a co-owned building changes the type of housing expenses you will have to manage.
You may no longer face occasional major expenses such as repairing an entire roof or replacing an individual boiler, but you will instead have recurring co-ownership charges.
These can cover:
- maintenance of communal areas;
- collective heating, where applicable;
- building insurance;
- contributions to the building's works fund.
Before buying, it is essential to request the minutes of the co-owners' general meetings from the previous three years.
These documents can help you assess the financial health of the co-ownership and identify any major works that have already been approved but not yet carried out.
Lift, Floor Level and Accessibility
The floor on which the apartment is located and the presence of a lift deserve particular attention, especially if you intend to remain in the property as you get older.
An apartment on a high floor without a lift may become increasingly difficult to access over time.
By contrast, a ground-floor apartment with outdoor space or an apartment on the first floor of a building with a lift may offer greater long-term convenience.
You should also check the accessibility of the building itself, including:
- the width of doors;
- steps at the entrance;
- access to a lift;
- proximity to parking.
These are practical details that should be assessed during an in-person viewing rather than relying solely on the listing photographs.
Finding a Property That Meets Your New Needs
The apartment market offers a wide variety of properties, so it is important to define your search criteria carefully according to your preferred size, floor level, location and neighbourhood.
Browsing Optimhome property listings can help you identify apartments that match your new lifestyle and refine your search before arranging viewings.
The aim is not simply to move into a smaller property, but to find a home that will remain comfortable, practical and suitable for your needs over the long term.
Coordinating the Sale of Your House and the Purchase of Your Apartment
Selling with Deferred Occupancy
To avoid finding yourself without accommodation between selling your house and moving into your apartment, it is possible to negotiate a deferred occupancy arrangement with the buyer.
The preliminary sale agreement and final deed are signed as usual, but the seller remains in the property for an agreed period after completion, generally in exchange for an occupancy payment.
This gives you additional time to finalise the purchase of your new apartment without having to arrange a rushed temporary move.
However, this solution requires the buyer's agreement and will largely depend on their own circumstances, particularly whether they need to move into the property immediately.
Buying Before Selling with a Bridging Loan
Another option is to purchase your apartment before your house has been sold by using a bridging loan (prêt relais).
This is a short-term loan, generally granted for 12 to 24 months, based on a proportion of the estimated value of the property you are selling—often around 60% to 80% of its value.
A bridging loan can allow you to secure the right apartment without waiting for your house sale to be completed.
However, it also means temporarily managing two sets of housing-related repayments and requires a reliable valuation of the property you are selling.
If the house is overvalued, the bank may reduce the amount it is prepared to lend, which could affect your financing plan.
Coordinating Both Transactions
Whichever solution you choose, working with a professional who can follow both sides of the project—the sale of your current house and the search for your new apartment—can make coordinating the two timelines considerably easier.
This can be particularly useful when downsizing also involves moving to another area, as the geographical distance adds another layer of complexity to the transaction.
Work with an Optimhome Real Estate Advisor
Successfully downsizing means coordinating two property transactions, obtaining a realistic valuation of your current home and anticipating the tax implications of the move.
Professional support can often make the difference between a project managed under pressure and one planned carefully from the outset.
Working with a local Optimhome real estate advisor gives you access to two complementary areas of expertise: detailed knowledge of the local market to help you sell your house under the right conditions, and support in finding an apartment that suits your new needs.
Your Optimhome advisor can also help you determine which timing solution is best suited to your circumstances—deferred occupancy or a bridging loan—and coordinate with your notary and, where necessary, your bank.
The aim is to ensure that the transition from your house to your apartment takes place as smoothly as possible, without leaving you temporarily without accommodation.
Conclusion
Selling your house to move into a smaller property is a decision that requires careful planning, both financially and practically.
- Downsizing is driven by practical lifestyle changes, including an empty nest, retirement, a desire to reduce maintenance and running costs, and easier access to everyday amenities.
- The financial calculation is based on the difference between the proceeds from selling your house and the total cost of purchasing your new property, after expenses. In many cases, this can release additional capital.
- Capital gains tax does not generally apply when selling your main residence, but the tax implications should be considered if another type of property is being sold at the same time.
- The costs associated with both transactions and the timing of the move—particularly whether to use deferred occupancy or a bridging loan—should be planned in advance.
- Moving into an apartment introduces new practical considerations, including co-ownership charges, lifts and long-term accessibility.
Working with a real estate professional can help secure each stage of the process and make the transition to this new phase of life easier to manage.
FAQ
Is Downsizing Only for Retired People?
No. Although retirement is a common reason for downsizing, it can also appeal to younger homeowners whose children have left home or anyone who simply wants to reduce their housing costs and the amount of time spent on maintenance. Age is not the deciding factor. Downsizing is simply about choosing to sell your current property and move into a smaller home that better suits your needs.
How Can I Tell Whether Downsizing Will Actually Release Capital?
Compare the estimated net proceeds from selling your house—after estate agent fees—with the total cost of the apartment you intend to purchase, including the purchase price, notary fees and any renovation work required.
Obtaining a reliable valuation of the property you are selling is essential before making this calculation.
Do I Have to Pay Capital Gains Tax When Selling My Main Residence?
No. In France, the capital gain made on the sale of your main residence is exempt from tax, regardless of the amount of the gain or how long you have owned the property.
However, this exemption does not generally apply to a second home or rental property.
What Is a Deferred Occupancy Sale?
A deferred occupancy clause allows the seller to remain in the property for an agreed period after the final deed of sale has been signed, generally in exchange for an occupancy payment.
This gives the seller additional time to complete the purchase of their new home without having to arrange a rushed temporary move.
Is a Bridging Loan Risky?
A bridging loan carries some risk if the property takes longer than expected to sell, as you may need to continue making payments on the bridging loan alongside the financing costs of your new apartment.
A realistic valuation of your current property and careful financial planning can help reduce this risk.
What Should I Check Before Buying an Apartment in a Co-Owned Building?
It is advisable to review the minutes of recent co-owners' general meetings, the amount of the regular co-ownership charges, the existence of a works fund and the general condition of the building.
You should also check whether there is a lift and assess the accessibility of the communal areas, particularly if you intend to remain in the apartment over the long term.
Should I Sell My House Before Looking for an Apartment?
There is no single approach that works for everyone.
Some homeowners prefer to secure the sale of their house before committing to a new purchase, while others use a bridging loan to secure the right apartment without waiting for their current property to sell.
The best option will depend on your financial circumstances, local property market conditions and how comfortable you are with temporarily managing the costs of two properties.
Author :
Fabrice DOBROWOLSKI - Optimhome Network Development Director
Optimhome offers you personalized support for your real estate project. Benefit from all my advice, based on several years of experience, to ensure the success of your project.
