Downsizing Your Home And Superannuation

Above-cap downsizer contributions for over 65 year olds from 1 July 2018, or 60 years from 1 July 2022. The eligible age has been further reduced to 55 years from 1 January 2023.

In a series of superannuation measures directed at improving access to home ownership a person aged 65 or over (60 years from 1 July 2022, 55 years from 1 January 2023) can 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 downsizer rules apply to proceeds from contracts for the sale of a main residence entered into (exchanged) on or after 1 July 2018.

The downsizer contributions are in addition to those currently permitted under existing rules and caps and they are exempt from the existing age test, work test and the balance cap on non-concessional contributions.

The downsizer measures apply to sales of a principal residence owned for the past 10 years or more, and both members of a couple can take advantage of the concession for the same home (for a total of $600,000 of eligible contributions).

Legislation see: First Home Super Saver Tax Bill 2017

Downsizing Contribution Checklist

• 65 years old or over at the time of contribution; 60 years or over from 1 July 2022, or 55 years from 1 January 2023).
• 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
• Contributions limit of $300,000 per individual
• Downsizer contribution Form 75073 is submitted to your super fund on or before the time of contribution.

* There is a Tax Office discretion to allow an extension of time for downsizer conributions. It must be granted by the Commissioner before the individual makes a contribution to their fund outside of the 90 day period. The ATO advises that extensions may be granted for ‘factors outside your control, like ill health or a death in the family’ (not age).

Audit Requirements – SMSFs

For audit requirements covering downsizer contributions – see updated information from the Tax Office here: Sufficient and appropriate audit evidence to support the acceptance of downsizer contributions

Further information

• Law Companion Ruling LCR 2018/9 Housing affordability measures: contributing the proceeds of downsizing to superannuation
• Guidance note GN 2018/2 Downsizer contribution
• Downsizer contributions ready for 1 July
• Downsizing contributions into superannuation

This page was last modified 2022-12-01