The Colorado Downsizing Playbook

This guide helps you decide whether it is time to right-size, run the numbers on your equity, avoid the Colorado tax surprises most downsizers miss, and plan a move that happens once.

Get the free printable PDF with the worksheets and checklists.

Download the Downsizing Playbook (PDF)

Is It Time to Downsize?

Most people start thinking about it when two or more of these are true:

Bedrooms sit empty most of the year
Stairs, snow shoveling or yard work have become a chore
Utilities, insurance and upkeep feel high for how you live now
You want to be closer to family, your doctors or a walkable downtown
Your home has gained a lot of value, and you would like that equity working for you
You want a main-floor primary bedroom or a home with no steps

Run Your Numbers

Step	What to estimate
1	Likely sale price of your current home (we will prepare a free estimate)
2	Minus your mortgage or HELOC payoff
3	Minus selling costs: commission (negotiable), title, closing and prep
4	Equals your net proceeds before taxes
5	Compare with the price of your next home, plus buying and moving costs

Then compare monthly costs. Many downsizers find the biggest savings come from lower utilities and upkeep, not just the mortgage. Try our home equity calculator or request a free home value estimate.

Colorado Details Most Downsizers Miss

The federal home sale exclusion

If you owned and lived in your home for two of the last five years, you can generally exclude up to $250,000 of gain from federal income tax, or $500,000 for a married couple filing jointly. Long-time owners with larger gains should talk with a CPA before listing.

The senior exemption stays with the house

Colorado's Senior Homestead Exemption (65+, 10 years in the same home) exempts 50% of the first $200,000 of a home's actual value. A temporary rule let movers keep it for 2025 and 2026, but it ended with Senate Bill 26-116. From the 2027 tax year, a move generally means losing the exemption and restarting the 10-year clock.

Buy First or Sell First?

Approach	How it works	Best when
Sell first	Sell, then buy with cash in hand; a rent-back lets you stay a few weeks after closing	You want certainty about your budget
Buy first	Buy using savings, a HELOC or a bridge loan, then list	You want one move and can carry two homes briefly
Contingent offer	Your purchase depends on selling your current home	Sellers in your target area accept contingencies
Cash purchase	Pay cash for the smaller home, then sell	You have the reserves and want the strongest offer

What to Look for in Your Next Home

One-level living: a main-floor primary suite and laundry, with few or no steps. Browse ranch homes in Longmont and Frederick.
Low maintenance: patio homes, townhomes and condos where the HOA handles snow and landscaping.
55+ communities such as Anthem Ranch in Broomfield, with clubhouses and activities.
Location: time to family, your doctors and everyday errands.
Metro districts: many newer neighborhoods add a metro district tax; check the actual bill.

Your 12-Week Plan at a Glance

Weeks 1-2: home value estimate, net proceeds sheet and a talk with your CPA or advisor. Weeks 3-6: measure the next home and sort belongings; give family a deadline for heirlooms. Weeks 5-8: estate sale or consignment and small repairs. Weeks 7-10: list with professional photos and book movers. Weeks 10-12: close, move and update your address. The PDF has the full plan and checklists, and our home seller prep checklist covers getting the house ready.

Thinking About Downsizing?

The New Horizons Team will prepare a free home value estimate and net proceeds sheet, help you compare next-home options in Northern Colorado and the Denver area, and coordinate both sides so you only move once.

Call or Text 720-432-8695

Updated October 2026. General information only, not legal, tax or financial advice. Rules and programs change; talk with a CPA, an elder law or estate attorney, or a lender about your situation. New Horizons Team | LoKation Real Estate.