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 a person aged 65 or over can make non-concessional contributions (“downsizer contributions”) of up to $300,000 from the proceeds of one sale of a main residence.

[Update 11 May 2021] The Government has announced that the downsizer contributions eligibility age will be reduced from 65 years to 60. Enabling legislation is expected to take effect from 1 July 2022. (Budget Paper No. 2 page 18)

For progress of legislation, see Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021.

Press release here.

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: First Home Super Saver Tax Bill 2017

Downsizing Contribution Checklist

  • 65 years old or over (soon to be 60 years 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.

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

This page was last modified 2021-10-27