Downsizing Your Home And Superannuation

Above-cap downsizer contributions for over 65 year olds – from 1 July 2018.

In a series of superannuation measures directed at improving access to home ownership, the government will allow a person aged 65 or over to make non-concessional contributions (“downsizer contributions”) of up to $300,000 from the proceeds of one sale of a main residence.

Any contributions not meeting the requirements of a downsizer contribution will be counted against the relevant contribution cap unless the superannuation provider refunds the amount.

The amendments apply to proceeds from contracts for the sale of a main residence entered into (exchanged) on or after 1 July 2018.

These contributions will be in addition to those currently permitted under existing rules and caps and they will be exempt from the existing age test, work test and the $1.6 million balance test for making non-concessional contributions.

The measure will apply to sales of a principal residence owned for the past 10 years or more, and both members of a couple will be able to take advantage of this measure for the same home.

Parliament has approved the measures. See:

Downsizing Contribution Checklist

  • 65 years old or over at the time of contribution
  • Home sale contract is after 30 June 2018. 
  • Home was owned (by you or spouse) for at least 10 years 
  • Home is in Australia; not a caravan, houseboat or other mobile home
  • Home sale proceeds are CGT exempt as a main residence (or would have been if not a pre-CGT asset)
  • Time limit: Contribution within 90 days of receiving the proceeds of sale *
  • No previous downsizer contribution claimed from another home
  • Provide each super fund with the downsizer contribution form before or at the time of contribution

* There is a Tax Office discretion to allow an extension of time. It must be granted by the Commissioner before the individual makes a contribution to their fund outside of the 90 day period. Acceptable circumstances for the grant of an extension have not been published at the time of writing.

Further information

 

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This page was last modified 2018-11-07