Add Extra Cash to Your Super When You Sell Your Home

From 1 January 2023, those 55 and over can make a ‘downsizer’ contribution to their superannuation.

What’s a ‘downsizer’ contribution?

If you are aged 55 years or older, you can contribute $300,000 from the proceeds of the sale of your home to your superannuation fund.

Your downsizer contributions exclude the:

Existing age test,
Work test, and
The transfer balance threshold.

For couples, both members can take advantage of the concession for the same home. That is, if you and your spouse meet the other criteria, both of you can contribute up to $300,000 ($600,000 per couple). This is the case even if one of you did not have an ownership interest in the property that was sold.

Sale proceeds contributed to superannuation under this measure count towards the Age Pension assets test. Ensure a downsizer contribution is the right option for you because they are made once in a lifetime.

The Eligibility Criteria

You are 55 years or older (from 1 January 2023) at the time of making the contribution.
You or your spouse owned the home for ten years or more prior to the sale. The ownership period is generally calculated from the date of settlement of purchase.
The home is in Australia and is not a caravan, houseboat, or other mobile home.
You can either fully or partially claim a Capital Gains Tax (CGT) exemption on the sale proceeds of your home under the main residence exemption. You would also qualify for this exemption if the home were a post-CGT asset rather than a pre-CGT one (acquired before 20 September 1985). Contact us if you need assistance with this.
You provide your super fund with the Downsizer contribution into super form (NAT 75073) either before or at the time of making the downsizer contribution.
The downsizer contribution is made within 90 days of receiving the proceeds of sale. This is usually at the date of settlement.
You have not previously made a downsizer contribution to super from the sale of another home or from the part sale of your home.

Do I have to buy a smaller home?

The name ‘downsizer’ is a bit of a misnomer.

You don’t need to buy another home to access this measure. You don’t need to buy a smaller home either. Individuals can buy a larger and more expensive one if you wanted to.

Downsizer contributions are an excellent way to get money into superannuation quickly. And now that the age limit has reduced to 55 from 60, more people have an opportunity to use this strategy.

For assistance with downsizer contributions, contact your Aintree Group adviser today.

This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your financial advisers.