From 1 July 2018, if you’re aged 65 or older, you can contribute up to $300,000 from the sale of your home into super.
It’s called downsizer contributions and is part of the Federal Government’s plan to encourage older Australians to downsize into smaller properties.
Downsizer contributions don’t count toward any of the usual super contribution caps (including the $1.6 million balance cap) and you don’t need to meet the existing maximum age or work test rules.
Get advice before making the decision to downsize
For advice about the downsizer contributions or how selling your home may affect your Age Pension or other entitlements, give us a call on 1300 362 415 or send an email and we’ll get in touch.
Let’s look at some common questions about downsizer contributions:
How much can I contribute?
The maximum is $300,000 per person (or $600,000 for a couple). However, the downsizer contribution must come from the proceeds of the sale of your home. So, if a couple sells their home for $500,000, they can only contribute up to $500,000 between them.
Does the home I’m selling need to be my main residence?
Yes, but only for part of the time you’ve owned it. You qualify if you receive a partial or full main residence exemption for Capital Gains Tax purpose.
What kind of homes does it apply to?
This applies to the sale of any dwelling in Australia but excludes caravans, houseboats and mobile homes.
Does my spouse need to be on the title to make a contribution?
No. As long as you were on the title for the 10 years leading up to the sale, then you and your spouse can both make downsizer contributions to your super accounts.
What’s the 10-year rule?
You or your spouse must have owned the property continuously for at least 10 years leading up to the sale.
Do I actually have to ‘downsize’ to be eligible?
No. You’re not required to purchase a new residence after selling your home.
When can I make a contribution?
Generally, you’ll need to make your downsizer contribution within 90 days after your home changes ownership (usually the settlement date).
Can I sell my home now and contribute the funds to my super after 1 July 2018?
No. The change will only apply where the contract of sale is dated on or after 1 July 2018.