The downsizing contributions into superannuation was introduced in the 2017-2018 Budget as part of the Government’s reforms to reduce pressure on housing affordability. This allows people who are 65 years and over to make a contribution into their superannuation after selling their home.
Eligibity for the downsizer measure:
You can make a downsizer contribution up to a maximum of $300,000 if you satisfy all of the following:
- you have not previously made a downsizer contribution to your super
- you are 65 years old or older at the time you make a downsizer contribution
- the contract of sale is signed on or after 1 July 2018
- your home was owned by you for at least 10 years prior to the sale
- your home is in Australia and is not a caravan, houseboat or other mobile home
- the proceeds from the sale of the home are either exempt or partially exempt from capital gains tax under the main residence exemption
- you have provided your super fund with the Downsizer Contribution Into Super Form either before or at the time of making your downsizer contribution
- the downsizer contribution must be made within 90 days of receiving the proceeds of sale
Treatment of Downsizer Contributions:
Downsizer contributions are not tax deductible and will be taken into account for determining eligibility for the age pension.
Your downsizer contribution is not count towards either your non-concessional contribution or concessional contribution caps. You can still make the contribution even if you have a total super balance greater than $1.7 million.
However, the downsizer contribution will count towards your Transfer Balance Cap, currently set at $1.7 million. Please click the button below for more details: