Age limit lowered for Downsizer contribution
May 2nd, 2023
If you’re a homeowner aged 55 or over, you can boost your super with proceeds from the sale of your main residence as part of the ‘downsizer’ scheme.
The ‘downsizer’ contribution scheme lets you make a lump sum contribution from the net sale proceeds of your main residence into your super. Until last year, only those aged 60 years and over were eligible to do this, but in 2023 the law has changed to include Australians aged 55 and above.
This means if you’re aged 55 and over, you can contribute $300,000 to your superannuation account from the proceeds of the sale of your home. If you have a spouse and you’re both aged 55 and above, you can make a total contribution of up to $600,000 from the sale of your home, with each spouse contributing up to $300,000 into their respective super.
Downsizer contributions can significantly grow your super, but you should know all the rules and restrictions before proceeding.
Here are a few things to consider:
- You must meet eligibility conditions set by the ATO. This includes owning the home for at least 10 years and making your contribution within 90 days of the sale.
- Your spouse can make a downsizer contribution from the same sale, even if their name isn’t on the title.
- Your contribution isn’t limited by the $110,000 non-concessional contribution cap, and it doesn’t matter if you’ve stopped working. However, it will be considered as part of your ‘total super balance’. Talk to us if you have questions about what this means.
- Downsizing to a cheaper home could reduce your eligibility for the Age Pension.
- If you sell your family home, then purchase another for a lower price, that new home will continue to be excluded from the assets test by Centrelink for the Age Pension. However, any proceeds (money left over from that), whether held in a bank account or contributed to your super, is included in the asset and income test.