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For many older Australian homeowners, the downsizer contribution option allows them to boost their retirement savings with earnings from the sale of their homes.

As of 1 July 2022, the minimum age for people eligible for the downsizer scheme will be reduced from 65 to 60.

This means that after this date, homeowners aged 60 or above can contribute up to $300,000 to their superannuation from the sale of their homes.

Who is eligible?

Besides the eligibility age, there are other criteria you must meet in order to qualify for the downsizer scheme. These are as follows:

  • You have owned the home (in your name or your spouse’s name, or both) for at least 10 years prior to the sale.
  • The home is in Australia and isn’t a caravan, houseboat or other mobile home.
  • The proceeds from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption or would be entitled to such an exemption if the home was a CGT rather than a pre-CGT asset.
  • You provide your super fund with a ‘Downsizer contribution into super’ form, either before or when you make the contribution.
  • You make the contribution within 90 days of receiving the proceeds of the sale.
  • You have not previously made a downsizer contribution to your super.
     

Please note, if the home sold was only under your spouse’s name, you may also make a downsizer contribution, or have one made on your behalf, if you meet the above requirements.

It is also worth remembering that the $300,000 contribution limit applies to each spouse. So regardless of the total proceeds received from the sale, each spouse can contribute up to $300,000 each into their individual super funds.

Need more information?

To find out more about the downsizer scheme, eligibility criteria, how much you can contribute, and how to make contributions, please refer to the ATO website.

Important information

This information was prepared by Resolution Life Australasia Limited ABN 84 079 300 379, AFSL No. 233671 (Resolution Life). A copy of the Product Disclosure Statement can be obtained by contacting Resolution Life. This general advice has been prepared without taking into account your particular financial needs, circumstances or objectives. You should consider the appropriateness of this information in light of your circumstances. This advice is based on our understanding of current law as at September 2022, and is based on its continuance unless stated otherwise. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. Resolution Life do not actively monitor breach of superannuation contribution caps. You should keep track of the contributions made to your account in respect of the caps applicable to you. You should obtain professional advice before acting on the information contained in this communication. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information. Resolution Life is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

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