From 1 July 2018, if you are 65 years old or older and meet the eligibility
requirements, you may be able to choose to make a downsizer contribution into
your superannuation of up to $300,000 from the proceeds of selling your home.
About the downsizer measure
You can only make downsizing contributions for the sale of one home. You can’t access it again for the sale of a second home.
Downsizer contributions are not tax deductible and will be taken into account for determining eligibility for the age pension.
If you sell your home, are eligible and choose to make a downsizer contribution, there is no requirement for you to purchase another home.
Eligibility for the downsizer measure.
You will be eligible to make a downsizer contribution to super if you can answer yes to all of the following:
- you are 65 years old or older at the time you make a downsizer contribution (there is no maximum age limit)
- the amount you are contributing is from the proceeds of selling your home where the contract of sale exchanged on or after 1 July 2018
- your home was owned by you or your spouse for 10 years or more prior to the sale – the ownership period is generally calculated from the date of settlement of purchase to the date of settlement of sale
- your home is in Australia and is not a caravan, houseboat or other mobile home
the proceeds (capital gain or loss) from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption - you have provided your super fund with the Downsizer contribution into super form either before or at the time of making your downsizer contribution
- you make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually at the date of settlement
- you have not previously made a downsizer contribution to your super from the sale of another home.
Note: If your home that was sold was only owned by one spouse, the spouse that did not have an ownership interest may also make a downsizer contribution, or have one made on their behalf, provided they meet all of the other requirements.
Downsizer contribution amounts
If eligible, you can make a downsizer contribution up to a maximum of $300,000 (each). The contribution amount can’t be greater than the total proceeds of the sale of your home.
Note: If you sign a contract prior to 1 July 2018 you will not be eligible.
Timing of your contribution
You must make your downsizer contribution within 90 days of receiving the
proceeds of sale. This is usually at the date of settlement.
We can allow for a longer period if required because of circumstances outside your control. You will need to apply for an extension of time.
How to make a downsizer contribution
Before you decide to make a downsizer contribution, you should:
- check the eligibility requirements for making a downsizer contribution
- contact your super fund/s to check that they accept downsizer contributions. If you don’t currently have an open account with a super fund, you will need to open a new super account to make your downsizer contribution.
The downsizer contribution maybe a good opportunity to give your superannuation balance a boost, if you sell your family home and you are 65 years of age or over.
At Suttie Financial Group we can assess whether you are eligible to make a downsizer contribution, and if a downsizer contribution provides you a financial benefit. If this is relevant to your financial circumstances, please contact either Richard or Roland Blazevic to discuss.
