Can You Afford to Downsize? The Stay or Move Math, Line by Line

Most people decide whether to downsize on a feeling, then argue about a number they never worked out. This guide walks through what staying in your house really costs each year, what the smaller place would cost, what the sale leaves you with, and how long a move takes to pay for itself. Connecticut numbers are filled in, there's a worked example on a North Branford ranch, and there's a worksheet you can print.

Save this: The whole calculation is three steps. Add up what staying costs per year. Add up what the smaller place costs per year. Divide your one-time cost of moving by the yearly difference. That answer is your break-even, the number of years before moving pays for itself.

What do you need before you start?

Gather four things: your latest property tax bill, twelve months of utility bills, your homeowners insurance declarations page, and the closing papers from when you bought, plus receipts for any big improvements. Every line below comes from one of those four.

What does it actually cost to stay in your house?

Add up property taxes, homeowners insurance, heat, electric, water and sewer (or well and septic upkeep), and repairs. Then add the line most people forget: everything you pay someone else to do. Lawn, snow, gutters, the furnace service.

A common rule of thumb says a house costs about 1 percent of its value each year in maintenance. An older house with a roof or furnace coming due runs higher. Use your real numbers if you have them.

Property tax is the one you can calculate exactly. In Connecticut, you're taxed on 70 percent of your home's assessed value, multiplied by your town's mill rate. Take a house worth $600,000. Seventy percent is $420,000. At North Branford's rate of 28.91 mills, that's about $12,100 a year. The same house comes to about $11,900 in Guilford (28.4 mills), $9,700 in Madison (23.06 mills), and $9,300 in Branford (22.16 mills).

These are the current mill rates from the grand list that sets this year's tax bills (fiscal year 2026 to 2027). Rates change every year, so confirm yours with your town's tax collector. North Branford completed a revaluation last year, so a new assessment may have moved your bill in either direction. Your assessment may not match market value either, so your own tax bill is the final word.

 

What would the smaller place really cost?

Same exercise, new house. Mortgage payment or cash, property taxes (use the same formula on the actual assessment), insurance, heat and utilities, and the one that changes the picture, the condo or HOA fee.

A $450 monthly fee that replaces your plow service, your landscaper, and your roof fund is a very different number than one that covers almost nothing. Before you fall for a unit, ask the association these:

• What does the monthly fee cover? Heat, water, trash, snow removal, building insurance, exterior maintenance?
• How much is in the reserve fund, and when was the last reserve study?
• Have there been special assessments in the last five years, or are any planned?
• How old are the roof, siding, paving, and boiler?
• Is there any past or pending litigation?
• What are the rental cap, pet rules, and percentage of owner occupants? (These affect resale and buyer financing.)
• How much has the fee gone up each of the last three years?
• Can I see the budget, recent meeting minutes, and governing documents?

What does it cost to move?

These are the one-time costs, and they decide your break-even.

• Conveyance tax. Connecticut charges the seller 0.75 percent on the first $800,000 of the price, 1.25 percent on the portion from $800,000 to $2.5 million, and 2.25 percent above that. Most towns add 0.25 percent on top (some larger cities charge 0.5 percent). On a $600,000 sale that's about $6,000 before anyone has packed a box.
• Attorney fees. Connecticut is an attorney state, so plan on one at each closing. On the Shoreline, fees typically run $750 to $1,500 per closing. Get a written quote.
• Agent commission. Whatever you agree to in your listing agreement.
• Getting the house ready. Fix what leaks, breaks, or would scare an inspector. Paint over stains. Leave the dated kitchen clean and alone.
• Clearing out and moving. The dumpster, the hauler, the movers.
• Buying costs. Attorney, title, and recording fees on the smaller place.
• Overlap. If you buy before you sell, a few months of carrying two houses is real money.

"A move pays for itself in a specific number of years. Most people never work out what it is."

How much cash does the sale leave you with?

This is the part that often changes the answer. Take the sale price, subtract what you owe on the mortgage and the selling costs above, then subtract the price and buying costs of the smaller place. What's left is cash freed up from your equity.

Money that has been sitting in drywall for thirty years can go to work. It can cover the move itself, sit in savings, or fund something you've been putting off. What it earns belongs in your math, and your accountant or financial advisor can help you pick a number.

How do you work out your break-even?

Add up the one-time costs. Subtract the new yearly total from the old yearly total. Divide the first by the second.

Here's a full example. Every figure marked "example" is a placeholder, so swap in yours. A three-bedroom ranch in North Branford worth $600,000, paid off, moving to a $400,000 condo in the same town.

That's a yearly difference of $12,705.

Break-even: $48,100 ÷ $12,705 = about 3.8 years.

Cash left after the move: $600,000 minus $44,100 in selling and moving costs, minus $404,000 for the condo and buying costs, leaves about $151,900 freed up.

Will you owe tax on the sale?

Possibly, and it's worth knowing the number before you list. A rough gain is your sale price, minus selling costs, minus what you paid, minus the cost of major improvements. Say you paid $250,000 and put $50,000 into a kitchen and roof. With $37,100 in commission, conveyance tax, and attorney fees, the rough gain on a $600,000 sale is $262,900.

If you've owned and lived in the house for at least two of the last five years, a single seller can generally exclude $250,000 of gain from federal tax, and married couples filing jointly $500,000. In this example a single seller would have about $12,900 above the line, and a married couple would have none. This is an illustration only. Your accountant confirms how it applies to you, including if you've lost a spouse or the house has been in the family for decades.

Could you lose a tax break by moving?

Maybe, and it belongs in your Staying column. Connecticut has a state property tax credit for homeowners 65 and older under set income limits, and many towns add their own relief programs. Those programs usually come with income limits, a residency requirement, and an application window each spring. If you get a credit now and a move would end it, count it as part of what staying saves you.

Limits and deadlines change from year to year, so call your assessor's office and ask what you qualify for today.

Who should you ask before you decide?

Take these questions to the people who can answer them.

Your accountant:

• What's my cost basis, and do my improvements count?
• Does the exclusion apply to me, and will I owe anything?
• Would a taxable gain this year affect my Medicare premiums or other income-based benefits?
• Where should the freed-up cash go?

Your attorney:

• Are there liens, easements, or title issues I should know about now?
• What's the timeline from accepted offer to closing?
• Does anyone need power of attorney to sign?

Your assessor:

• What will my taxes be on the smaller place after I buy?
• Is a revaluation coming?
• Am I getting a relief credit now that I'd lose?

How do you read your break-even?

Compare it to how long you expect to stay. If your break-even is shorter than that, the numbers favor moving. If it's longer, the numbers favor staying, and that's a perfectly good answer.

The math only covers money. Stairs you've stopped using, being closer to family, and how much house you want to look after are real reasons too. Aging in Place or Making the Move? How to Decide covers that side. The low rate on your current mortgage plugs into the "Moving" column too, and I walked through it in The Golden Handcuffs: Is Your Low Rate Actually Keeping You Stuck?. If the numbers lean toward a move, Should You Sell Before You Buy? is the next question.

Your worksheet

Print this, fill it in, and keep it where you'll see it.

Break-even in years = one-time total ÷ (staying yearly total minus moving yearly total)

I've worked through this math with homeowners in North Branford, Guilford, and Madison, and it has come out both ways.

Kim Dawson is a REALTOR® with Coastal Connecticut Homes, serving the Connecticut Shoreline. A North Branford native, she specializes in helping homeowners 50+ navigate downsizing, relocation, and major life transitions.

Kim Dawson REALTOR® 203.481.4605

If you'd like me to run your numbers with you, I'm glad to. No pressure, no obligation.