Question: I have a first (and only) and self occupied home. Mortgage is fully paid. Home is with four rooms.

Considering expenses I done on home so far including my share in mortgage, taxes so far, total interest paid etc. I will be in profit by 1000000.

Prices of property are not growing considerably anymore; growth rate is minimized.

1. I do not need this much big home. Three rooms should be enough for me.
2. By booking the profit, I can invest the amount (other than my share in new home) in some good investments.
3. New home will be self-occupied as well; it will not be rented.

I can clearly see the benefit, but I am not sure about other financial aspects involved here.

1. New home will start new mortgage.
2. Taxes will not be much different.
3. As new home will be self occupied as well, there is no benefit other than the one gained while selling current home.

Is it advised to sell current self occupied home and buy the other new one to book the profit? If yes, what are the financial loop-holes to be considered while doing this?

I am not doing this for cash as asked [here](https://money.stackexchange.com/q/79211/73868). I am doing this for booking the profit.

Answer: 
> 
> I do not need this much big home. Three rooms should be enough for me.
> 
> 
> 

This is the only real tick mark in favor of selling your current home.

> 
> By booking the profit, I can invest the amount (other than my share in new home) in some good investments.
> 
> 
> 

Any profit you make from the sell will either be taxed, or invested in the next home. Is there a reason you wouldn't roll that over to the next house which would be tax advantaged?

Unless you have another reason like being closer to family, shorter commute, or always wanting to live in the city/on the coast/etc, I'd stay put.

**Moving always has one very big potential downside, neighbors for hell.**
There is no *profit* here, and there is no *investment*. It is your home and since everybody pays for the bed they sleep in, it is a cost, not an investment. If the house you are in has gone up in value, then so has the identical house next door and by the same amount, so moving from one to the other would not realize a return on an investment regardless of the change in the book value. 

What you are proposing is a simple downsizing. This will release capital and (probably) reduce your operating costs, but the transaction has some predictable costs involved which will need to be deducted from the capital released. It may seem obvious, but if you can not finance the change without taking on debt, then the change is not worth it.