Downsizing Contributions Into Superannuation

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 $1.6 million.

However, the downsizer contribution will count towards your Transfer Balance Cap, currently set at $1.6 million. Please click the button below for more details:

$1.6 Million Transfer Balance Cap

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