People aged 60 years and over may now be able to make downsizer contributions to superannuation
The Australian Taxation Office advises that since its introduction in 2018, the downsizer measure has allowed over 41,000 older Australians to sell their homes and collectively contribute over $10 billion into superannuation.
On 1 July 2022, the law changed so people aged 60 years and over may be able to make a downsizer contribution if they meet all of the eligibility requirements. Prior to this, the eligibility age was 65 and over.
What is a downsizer contribution?
A downsizer contribution is a contribution of up to $300,000 that an eligible person can make to their super from the proceeds of the sale (or partial sale) of their home, without it counting towards their contributions caps.
Couples may be able to contribute up to $600,000 from the sale proceeds into their super ($300,000 per person).
Before making a downsizer contribution
If you are considering making a downsizer contribution you may wish to seek financial advice as downsizer contributions will count as an asset for the age pension assets test.
The ATO advises that persons should also:
- check that you meet all of the eligibility conditions listed on the ATO website
- contact your super fund to check that they accept downsizer contributions
- provide your fund with the Downsizer contribution into superannuation form either before or at the same time as you make your contribution. If you don’t, your fund may not be able to accept your contribution as a downsizer contribution.
On 14 May 2022, as part of an election announcement, the Government announced it would support a further reduction to the downsizer eligibility age to 55 years. This is not yet law so the downsizer eligibility age is 60 years and over.
To find out more about downsizer contributions and for the full eligibility criteria refer to Downsizer contributions for individuals on the ATO website or the Contributing the proceeds of downsizing to super factsheet.
21 July 2022.